Unlock value of property to boost retirement cash

I refer to the report “Is ‘generous’ use of CPF funds a threat to retirement adequacy?” (July 23). As per my quote accompanying the report, the issue is how to achieve perpetual income for retirees.

There are approximately three generations of Singaporeans. The pioneers had low wages and fewer job opportunities, thus their Central Provident Fund (CPF) balances are low and they mostly depend on their children for retirement income.

The second category is the asset-rich, cash-poor generation, who were fortunate to buy their property before prices appreciated, but their CPF is mostly used for housing.

Then we have Generations X and Y, who have high salaries but also face high property prices.

With “perpetual income” in mind, the old-old have their children as their asset, the old have property, and the young-old have cash if they have not overcommitted in housing.

It is accepted that CPF alone will be insufficient for retirement here because of the rising cost of living and longer life expectancy. One must look at how to obtain cash flow from one’s assets.

The bulk of our assets would be in property, and both ministers at the CPF and Retirement Adequacy Forum acknowledged that we must find a way to unlock this value.

The panellists, mostly academics, acknowledged that this is more difficult with public housing, which is leased. The only asset residents have is the remaining lease of their flat, which is depreciating.

This means that the authorities must adopt a radical approach to allow residents to monetise their asset. This is not only a CPF issue but involves the Housing and Development Board and maybe even a government mandate.

We need a dedicated forum to search for solutions. Tuesday’s forum had to satisfy too many parties and too many issues.