Here’s How to Use Your HDB Flat to Plan for Your Retirement!

June 15, 2020

Make the most out of your retirement nest egg!

Ah, retirement – who doesn’t wish to live out their golden years and enjoy financial freedom? But here’s the reality: it takes a lot of planning to reach your retirement goals. Aside from the CPF payouts, some of us may also choose to invest in a solid portfolio of stocks or implement a financial plan to grow your financial assets. Yet, we often ignore one of the most important assets: our flat.

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For HDB dwellers, familiarising yourself with various ways of unlocking the value of your flat allows you to select the best option for a comfortable retirement - here’s a nifty guide on doing so!

1. Sell your remaining HDB lease

Under HDB’s Lease Buyback Scheme (LBS), homeowners aged 65 and above will have the option of selling the tail-end of their flat’s lease to HDB and receive a LBS bonus up to $30,000 for a 3-room or smaller flat, $15,000 for a 4-room flat, or $7,500 for a 5-room flat. The scheme allows you to retain up to 35 years of lease, as long as you retain enough lease that can last all homeowners till the age of 95.

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So how does the LBS work? Part of the net sale proceeds will be used to top up your CPF Retirement Account (RA). Your full RA savings will then be used to buy a CPF life plan, an annuity scheme that provides you with a lifelong monthly payout.

There are specific requirements, however. If you’re the sole owner of the flat, you’re required to use the proceeds to top up your RA according to the current age-adjusted Full Retirement Sum (FRS). For households with multiple owners, each owner will have to use their share of the proceeds to top up their RA according to the current age-adjusted Basic Retirement Sum (BRS).

Here’s an overview of how much you should be topping up if you’re applying from 1 January 2020:

Eligibility age for flat ownersTop-up requirement for 1 ownerTop-up requirement for 2 or more owners
(Currently 65) - 69$181,000$90,500
70 - 79$171,000$85,500
80 and above$161,000$80,500

Not only do you get to keep the remaining proceeds after the top-up, you’ll also receive the previously LBS bonus of up to $30,000, depending on your flat type.

To qualify for the LBS, the following conditions are to be met:

  • All owners must have reached the eligibility age of 65 or older
  • At least one owner must be a Singapore Citizen
  • Gross monthly household income of $14,000 or less
  • No concurrent ownership of second property
  • All owners have been living in the flat for at least 5 years
  • Have at least 20 years of lease to sell to HDB

2. Right-size to a smaller apartment

The Silver Housing Bonus (SHB) is an alternative for seniors who prefer to right-size to a smaller flat that requires less maintenance .

Homeowners selling their current home with Annual Value not exceeding $13,000 and are purchasing a 3-room or smaller flat can receive up to $30,000 cash bonus. To be eligible, you’ll need to top up $60,000 from your net sale proceeds into your CPF RA. If the top-up amount is less than that, a prorated cash bonus will be issued based on a 1:2 ratio. This means you will receive $1 in cash bonus for every $2 top-up made to your CPF RA.

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In order to be eligible for the SHB, there are a few criteria to fulfill:

  • At least one owner is a Singapore Citizen aged 55 or above
  • Gross monthly household income is within $14,000
  • No concurrent ownership of second property
  • Right-sizing to a 3-room or smaller flat from a bigger flat, or private property with annual value not exceeding $13,000

Additionally, if you’re right-sizing to a resale flat to live near your children, you can also qualify for the Proximity Housing Grant of up to $20,000.

3. Rent out your flat or spare rooms

Have extra space to spare? Consider renting out your property or bedrooms for some passive income. According to latest statistics, a 4-room flat can bring in an estimated $1,750 to $2,600 monthly – depending on the estate and flat type. Renting is a great way to utilise unused space while providing an affordable home for someone who’s in need of a place to stay. Win-win!

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Before listing your unit for rent, make sure that you’re able to fulfil the minimum occupation period of 5 years (and yes, you need to be a Singapore Citizen). If you’re renting out your spare bedrooms in a 3-room or bigger flat, prior approval from HDB is required before the new tenants may move in.

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At the end of day, it’s important to know what exactly suits your retirement needs and preferences. To help you better understand the options, HDB provides personalised financial counselling sessions where you can find out more about the various monetisation schemes. And it’s a super stress-free affair: simply make an e-appointment at a HDB branch and you’ll be in good hands.

Voila, consider your retirement plans sorted!


This article was adapted from MyNiceHome, HDB’s official website for all things related to home buying and renovation in Singapore. Check out the original article here.

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