Why I would not encourage my mother to take up the Enhanced HDB Lease Buyback Scheme
On 03 Sep 2014, the government announced four enhancements to the HDB Lease Buyback Scheme (LBS) as follows:1) The scheme will be extended to 4-room HDB flats and to sweeten the deal, there will be a $10,000 cash bonus per household when the elderly participate in the scheme.
2) The income ceiling will be raised to $10,000 from $3,000 per month to allow elderly who are still working or still living with their family members to qualify for this scheme.
3) The requirements to top up their CPF Retirement Accounts with the LBS proceeds will be relaxed as reflected in Table 1 below.
Table 1: Change in CPF Top-Up Requirement* for Households with Two or More Owners
Owner’s Age | Current (Age-Adjusted MS) | New (0.5 x Age-Adjusted MS) |
CPF Draw-Down Age (now 63) to 69 | $155,000 | $77,500 |
70 to 79 | $145,000 | $72,500 |
80 or older | $135,000 | $67,500 |
By and large, the LBS is a good scheme that allows the elderly the additional option to monetize their property asset to fund their retirement needs. But then again, I would not encourage my mother to participate in it. This is because I know my mother too well. She lacks the financial discipline and will to handle the large amount of money. Within months, I am quite sure she would use up the proceeds from the LBS. So I prefer her to rent out the spare room in her flat. In this way, she can still monetize her flat and in addition, we also give her monthly allowances to supplement her monthly expenses.
Magically yours,
SG Wealth Builder
I think it is a good scheme but it must be well-thought out before agreeing to the scheme.
I agreed. Our government really take care of us.
But I wonder how many old folks out there fully understand this scheme?
Hopefully the local blogging community can help to bridge this gap.
Regards,
SG Wealth Builder