By: Syasya Nur
Worrying for your parent’s golden years is an issue that many working adults face. Fret not, as the retirement plans for your parents may just have improved. Deputy Prime Minister (DPM) Heng Swee Keat recently announced in the Singapore Budget 2020 that there will be enhancements to the Silver Housing Bonus and the Lease Buyback Scheme.
Increments in Silver Housing Bonus for Parents’ retirement
It is likely that we will see increments in the Silver Housing Bonus (SHB). This is expected as DPM Heng Swee Keat heavily emphasized the importance of ageing with confidence by having financial assurance in our parent’s retirement plans.
Currently, if one of your parents is above 55 years old and owns a bigger flat type, they are able to rightsize their flat to supplement their retirement income. Upon selling their existing flat, they can either buy a smaller and cheaper flat from the resale market or a smaller flat from HDB, such as a two-room Flexi or a 3-room flat.
This entitles your parents to a cash bonus of up to $20,000 per household. This depends on the net sale proceeds and the amount topped up to their CPF accounts for retirement. An increase in these bonuses would be expected, given the government’s increasing support for the Silver generation.
Increments in Lease Buyback Scheme for Parents’ retirement
The Lease Buyback Scheme (LBS) on the other hand, enables your parents to sell the remaining tail-end of their lease. If both your parents are 65 or older, have a gross monthly household income of $14,000 or less and have a minimum lease of 20 years to sell to HDB, they are eligible for this scheme.
Your parents would receive bonuses of up to $20,000 depending on their flat type. $20,000 would be given to 3-room flats or smaller, $10,000 for 4-room flats and $5000 for 5-room flats or bigger. This bonus is in addition to the proceeds your parents will get after selling their lease. They will receive this bonus after the proceeds from the lease are used to top up their CPF Retirement Account (RA) according to CPF’s requirements.
At this juncture, there is a stipulated cap of $100,000 that can be kept in cash. This amount is inclusive of the bonus and the remainder of the nett proceeds after the top-up to your parents’ Retirement Account. We can look forward to a potential increase in this cap so that your parents can retire comfortably. Further details will be furnished by the Ministry of National Development.
Increases in the bonuses attained from both schemes can go far in alleviating the financial worry for your parents’ retirement. They can rightsize their bigger flat type to a smaller and more comfortable one. If they sell the tail end of their lease at the same time, it would be killing two birds with one stone as they can benefit from two schemes at the same time.
This would definitely increase their retirement income. You would not need to worry as your parents can enjoy a rise in the bonuses received, given the enhancements to the SHB and LBS in the 2020 Singapore Budget.
We can help you out with these as well:
- Financial calculations
- Affordability calculations
Selling an old flat? If you need assistance to guide you through the process, Ohmyhome’s team of experienced and knowledgeable property agents are here to help, completely free of charge.