When right-sizing is the right fit for you

To move or not to move? Find out how shifting to an HDB flat of the right size could help with retirement

HDB 2-room Flexi Scheme Housing in Singapore
Ms Peggy Leong, 65, right-sized from a four-room to three-room flat to suit her needs. PHOTO: HOUSING AND DEVELOPMENT BOARD

If you have more room than you need in your flat, now that your family members have moved out, you may be contemplating: Should I move to a smaller unit or stay put?

For Ms Peggy Leong, 65, the idea of moving to a smaller flat came to mind after her mother was placed in a nursing home.

"About 10 years ago, my mother, who was in her 80s and living with me, began to lose strength in her hands and legs. As I was working, I decided to place her in a nursing home so she could have around-the-clock care," she says.

"My four-room flat felt empty without her."

In 2009, the Housing and Development Board (HDB) announced that their flat would be one of 300 units in Bukit Merah View selected for the Selective En bloc Redevelopment Scheme (SERS). Ms Leong decided to take up a replacement flat offered by HDB, and right-sized to a three-room flat in the Boon Tiong Road area.

"I wasn't sure if I could get used to the smaller space. But the longer I lived here, the more I grew to love my home."

A space that fits your lifestyle

Flat owners, like Ms Leong, can choose to right-size to an HDB flat that is optimum for them so long as they meet the eligibility conditions.

They may choose to buy a smaller flat when they find their current flat too big to upkeep, especially after their children have moved out or if they have lost a parent or partner.

Ms Leong, who is single, currently works as an administrative assistant at Ng Teng Fong General Hospital. In her spare time, she catches up with friends over a meal.

"I don't cook much at home, so I prefer a smaller space. As you get older, you don't have the energy to clean the house like you did before. This three-room flat is just right for me."

The silver (housing bonus) lining

Lifestyle needs aside, right-sizing to a smaller flat lets seniors unlock value from their existing property.

Let's say you sell your five-room HDB flat at $520,000 and move to a two-room flexi flat that costs $120,000. After clearing any outstanding home loans and costs of, say, $100,000, you will have $300,000 in net sale proceeds that can be set aside for retirement.

On top of the net sale proceeds, elderly flat buyers can also benefit from the Silver Housing Bonus (SHB). The SHB scheme was introduced in 2013 to supplement the retirement savings of the elderly.

Singaporean seniors aged 55 and above who move to a three-room or smaller flat can receive up to $20,000 in cash bonus when they use some of their net sale proceeds to top up their CPF Retirement Account and join CPF LIFE. They may keep the balance net sale proceeds as cash.

Having joined CPF LIFE, they will receive monthly payouts for as long as they live.

Ms Leong says: "I received the Silver Housing Bonus when I right-sized my flat, and am keeping it for my retirement. I'm still working now, but I'd like to retire when I'm 75 years old."

Two-room flexi flats for seniors

HDB 2-room Flexi Scheme Housing in Singapore
At least 40 per cent of new two-room flexi flats are set aside for elderly applicants under the 2-room Flexi Scheme. PHOTO: HOUSING AND DEVELOPMENT BOARD

When it comes to right-sizing, seniors can consider HDB's two-room flexi flats. At least 40 per cent of new two-room flexi flats, or 100 units in each BTO project, are set aside for elderly applicants under the 2-room Flexi Scheme.

Half of these are set aside for eligible elderly under the Senior Priority Scheme (SPS), which helps seniors to apply for flats near their parents or married child. Seniors aged 55 and above who buy a two-room flexi flat are able to take up a lease of between 15 and 45 years, as long as it covers them and their spouse up to the age of at least 95 years old.

Two-room flexi flats are available in two sizes: 36 sq m and 45 sq m. Seniors can opt for their flats to be fitted with elder-friendly features such as window grilles, and built-in kitchen cabinets with induction hobs and a cooker hood. Every flat will also include grab bars, installed for the safety of seniors.

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