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Seems like a lot of pple are arguing that use all CPF money = no money for retirement.
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HDB InfoWEB: How Does LBS Work : Living in HDB flats : Maximise your finances with your flat
Read this page
HDB InfoWEB: How Does LBS Work : Living in HDB flats : Maximise your finances with your flat
Under LBS, HDB will:
Buy back the tail end lease of the flat ; and
Provide $10,000* subsidy in addition to the unlocked housing equity; and
Give $5,000^ out of the total amount unlocked, to the household as an upfront lump sum cash payment. The remainder will be used to purchase an Immediate Annuity from CPFB to provide a monthly stream of income for life for the elderly lessees.
* Those who had previously owned a 4-room or bigger flat would receive a subsidy of $5,000.
^ The upfront lump sum of $5,000 will be used to offset the outstanding loan in the first instance. The cash payment received will depend on the amount used to pay the outstanding loan.
The LBS household members will continue to stay in their flat, for a period of 30 years, which is the remaining number of years after HDB buys the tail end portion of the lease.
How Much Monthly Income Will I Receive for Life?
The amount of monthly income that an elderly household will receive from the LBS will depend on the:
Market value of the flat;
Length of remaining lease;
Amount of outstanding loan on the flat; and
Age and gender of the elderly owner(s).
Consider an example of a 3-room flat, which has a remaining lease of 70 years and a market value of $236,000. Under LBS:
HDB will buy 40 years of the lease at $104,000 and provide a top-up of $10,000 in Government subsidy
From the $114,000, $5,000 lump sum will be paid upfront
This leaves $109,000 remaining to purchase an Immediate Annuity from CPFB that yields a monthly payout for life as follows:
Monthly payout from $109,000 (figures are indicative):
Monthly Payout from Immediate Annuity* 63 yrs old 65 yrs old 70 yrs old 80 yrs old
Sole Male Flat Owner $530 - $560 $540 - $580 $600 - $640 $780 - $820
Sole Female Flat Owner $480 - $520 $500 - $530 $540 - $580 $680 - $720
Male and Female Joint Flat Owners** $510 - $540 $520 - $560 $570 - $610 $730 - $770
* Monthly payouts are shown in ranges as the monthly payouts that a LBS household receives under CPF LIFE may be adjusted yearly to take into account factors such as CPF interest rate and mortality experience. This payout range is based on CPF interest rates of between 3.75% and 4.25% and does not represent the lower and upper limits of the payouts.
** The Immediate Annuity amount of $109,000 is divided equally between the joint owners falling in the same age group. The payout shown is the sum of the amount that each household will receive for as long they live.
Here’s an illustration of the above example.
The payout under the Immediate Annuity is in addition to whatever source of income the elderly households already have, e.g. CPF savings, investments, insurance, rent from subletting of rooms etc.
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Click on the following links for more illustrations under the various eligibility criteria, which were implemented from 1 April 2010.
Owned a 4-room or bigger flat previously
Outstanding loan more than $5,000
Owned a 4-room or bigger flat previously and outstanding loan more than $5,000
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Owned 4-Room Or Bigger HDB Flat Previously
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Outstanding Loan More Than $5,000
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Owned 4-Room Or Bigger Flat Previously And Outstanding Loan More Than $5,000
