Can't help but to raise this issue again: Please Read NEWS with eyes wide open and brain functioning!
It is really hilarious to see news reported of some issues or some comments that doesn't make sense, and yet appear in newspapers as though they are facts! This time, I am referring to a Channel News Asia article with title: "Experts optimistic about take-up rate of buyback scheme", you can read the details at this URL...
The part I am referring to are as follow:
" Property analysts have welcomed the extension of the Enhanced Lease Buyback Scheme to four-room flats, noting that the option to unlock value from their dearest asset would now be available to close to 60 per cent of the population.
...
He also felt there was no need to extend the scheme to owners of five-room or bigger flats. “They can always downgrade. They also have more rooms to lease out for additional income,” he said. "
Comments:
* If 5-room flat owners can always downgrade, the same is also true of 4-room flat owners, why disadvantage against 5-room flats' owners?
* HDB 5-room flats also only have 3 bedrooms, and are no different in term of number of bedrooms compared to 4-room flats! So, if 5-room HDB flat owners can lease out their rooms for additional income, the same is also true for 4-room HDB flat owners which also have the same number of bedrooms. So, why there is no need to extend the scheme to owners of 5-room flats when 5-room flats are just like 4-room flats (except with an additional dining room)?!
Showing posts with label Lease Buyback Scheme. Show all posts
Showing posts with label Lease Buyback Scheme. Show all posts
Monday, August 18, 2014
PM's National Day Rally speech - Lease Buyback Scheme & New Silver Support Scheme & CPF changes
The Prime Minister's National Day Rally speech looks like a welcome to those silver hairs generation who have little cash on hand but with a HDB flats as an asset. I extracted some relevant portions from the news:
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Lease Buyback Scheme extended to 4-room flats:
"CPF members can count their homes in the Minimum Sum, meaning they need to set aside just half of it in cash, which works out to S$77,500. Mr Lee conducted a poll of the audience at the Rally using an example of a fictitious couple Mr and Mrs Tan.
"I ask Mr Tan - how much do you think you will need in retirement every month?" Mr Lee said. "What do you think? S$3,000 per month? That's about two-thirds what he is getting now. S$2,000 per month - less than half what he is getting now? Or S$1,000 per month?"
The majority picked S$2,000 a month. Mr Lee said this means the Tans will need S$250,000 for their retirement needs - which is more than the Minimum Sum. And if Mr and Mrs Tan pledged their home, the amount of S$77,500 kept in their CPF account would only give them S$600 a month. They would then need to find other sources of income to plug the shortfall.
Mr Lee said there are options to achieve this, including continuing to work, getting support from their children, tapping on savings or getting money of out their house.
For example, he could rent out a room for S$700 a month, or move in with his children and rent out the entire flat for S$2,500 a month.
"The third thing you could do is to 'right-size': sell this flat and buy a smaller flat. Let's say you buy a studio apartment, you move into the studio apartment and then in the process, you can enjoy a silver housing bonus from the Government which is S$20,000. We can do the sums, you get quite a lot of money - S$210,000, plus S$800 per month," explained Mr Lee.
Another option is the Lease Buyback Scheme, which will be extended to 4-room flats. In Mr Tan's case - if he sells the remaining lease of 35 years to HDB - he will receive a lump sum of S$27,500 in cash, plus S$900 per month.
The Lease Buyback Scheme currently covers 3-room flats and below. Mr Lee says that extending it to 4-room flats will cover more than half of all flat owners in Singapore. "
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PM Lee's National Day Rally Speech - Overview:
" Singapore Prime Minister Lee Hsien Loong has highlighted the need for economic growth and a cultural change to help all Singaporeans achieve their potential. Speaking at the National Day Rally on Sunday (Aug 17) evening, Mr Lee outlined how Singaporeans can attain success through different routes, regardless of their academic qualifications. To help the older generation of Singaporeans, Mr Lee also announced policy enhancements to the national savings scheme.
Mr Lee also gave more assurance that older Singaporeans would be provided for after they are retired. He said the national savings scheme - the Central Provident Fund (CPF) - has served Singaporeans well. "It works well for most Singaporeans, but not quite for all, especially the lower income. Also it is not quite flexible enough, and I think we can and should improve the scheme further," Mr Lee said.
A new scheme for low-income elderly Singaporeans called Silver Support will be introduced. Low-income seniors will receive an annual bonus from the Government, starting from age 65, to help with living expenses.
Singaporeans could soon also have the option to take out part of their CPF savings in a lump sum when they need to, subject to limits. Mr Lee also said the CPF Minimum Sum will be raised to S$161,000 next year, but added that he did not see the need for further major increases in the Minimum Sum beyond that.
In closing, Mr Lee urged Singaporeans to be the pioneers of their own generation in the next 50 years and beyond. "
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You can read the full details at this URL and this URL...
Comments:
In the example quoted by Mr Lee, he said Mr Tan says he need $2000 a month for retirement as this is less than half his salary. However, I feel Mr Tan's figure should be referring to his household expenses with his wife and not him alone? This is because if we take 1 person's salary, then we also know that about 70-80% of Singaporeans don't earn more than $4000 per month individually, so taking an income of somebody who earns above the 70-80% percentile is not a good example. We should be taking the bottom 20th percentile which should be about $1,500 per month salary.
Remember, CPF Life is meant for basic living, the bottom 20th percentile living expenses (below 20th percentile the government is helping them through subsidies), not the top 70-80th percentile living expenses.
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Lease Buyback Scheme extended to 4-room flats:
"CPF members can count their homes in the Minimum Sum, meaning they need to set aside just half of it in cash, which works out to S$77,500. Mr Lee conducted a poll of the audience at the Rally using an example of a fictitious couple Mr and Mrs Tan.
"I ask Mr Tan - how much do you think you will need in retirement every month?" Mr Lee said. "What do you think? S$3,000 per month? That's about two-thirds what he is getting now. S$2,000 per month - less than half what he is getting now? Or S$1,000 per month?"
The majority picked S$2,000 a month. Mr Lee said this means the Tans will need S$250,000 for their retirement needs - which is more than the Minimum Sum. And if Mr and Mrs Tan pledged their home, the amount of S$77,500 kept in their CPF account would only give them S$600 a month. They would then need to find other sources of income to plug the shortfall.
Mr Lee said there are options to achieve this, including continuing to work, getting support from their children, tapping on savings or getting money of out their house.
For example, he could rent out a room for S$700 a month, or move in with his children and rent out the entire flat for S$2,500 a month.
"The third thing you could do is to 'right-size': sell this flat and buy a smaller flat. Let's say you buy a studio apartment, you move into the studio apartment and then in the process, you can enjoy a silver housing bonus from the Government which is S$20,000. We can do the sums, you get quite a lot of money - S$210,000, plus S$800 per month," explained Mr Lee.
Another option is the Lease Buyback Scheme, which will be extended to 4-room flats. In Mr Tan's case - if he sells the remaining lease of 35 years to HDB - he will receive a lump sum of S$27,500 in cash, plus S$900 per month.
The Lease Buyback Scheme currently covers 3-room flats and below. Mr Lee says that extending it to 4-room flats will cover more than half of all flat owners in Singapore. "
------------------
PM Lee's National Day Rally Speech - Overview:
" Singapore Prime Minister Lee Hsien Loong has highlighted the need for economic growth and a cultural change to help all Singaporeans achieve their potential. Speaking at the National Day Rally on Sunday (Aug 17) evening, Mr Lee outlined how Singaporeans can attain success through different routes, regardless of their academic qualifications. To help the older generation of Singaporeans, Mr Lee also announced policy enhancements to the national savings scheme.
Mr Lee also gave more assurance that older Singaporeans would be provided for after they are retired. He said the national savings scheme - the Central Provident Fund (CPF) - has served Singaporeans well. "It works well for most Singaporeans, but not quite for all, especially the lower income. Also it is not quite flexible enough, and I think we can and should improve the scheme further," Mr Lee said.
A new scheme for low-income elderly Singaporeans called Silver Support will be introduced. Low-income seniors will receive an annual bonus from the Government, starting from age 65, to help with living expenses.
Singaporeans could soon also have the option to take out part of their CPF savings in a lump sum when they need to, subject to limits. Mr Lee also said the CPF Minimum Sum will be raised to S$161,000 next year, but added that he did not see the need for further major increases in the Minimum Sum beyond that.
In closing, Mr Lee urged Singaporeans to be the pioneers of their own generation in the next 50 years and beyond. "
------------------
You can read the full details at this URL and this URL...
Comments:
In the example quoted by Mr Lee, he said Mr Tan says he need $2000 a month for retirement as this is less than half his salary. However, I feel Mr Tan's figure should be referring to his household expenses with his wife and not him alone? This is because if we take 1 person's salary, then we also know that about 70-80% of Singaporeans don't earn more than $4000 per month individually, so taking an income of somebody who earns above the 70-80% percentile is not a good example. We should be taking the bottom 20th percentile which should be about $1,500 per month salary.
Remember, CPF Life is meant for basic living, the bottom 20th percentile living expenses (below 20th percentile the government is helping them through subsidies), not the top 70-80th percentile living expenses.