It is quite a rubbish exercise without understanding the ground at all.
"RECOMMENDATION: Members who retire in 10 years’ time should set aside CPF savings to provide for a monthly payout of S$650 to S$700, or Basic Payout. To receive this Basic Payout, members have to set aside a Basic Retirement Sum. This is with the assumption that the member owns a home and does not need to pay rent." [Link]
To be able to own a home and does not need to pay rent nor mortgage at the age of 55, it means that if a couple is to buy a flat that requires 30 years mortgage, they will have to buy it at the age of 25! So, how many Singaporeans get married at that age, least have the money to pay the down payment to buy a HDB flat at 25?
Besides, after paying your HDB flat mortgage, you still can have over $80K left in your CPF account? How to achieve that?
This means that the 30 years mortgage is totally rubbish. If you need more than 20 years mortgage to buy a flat, it would mean that you could hardly afford it in the first place. PAP government just hoodwink you into believing that those HDB flats are "affordable" by extending the mortgage to 30 years so that you can "pay slowly" with huge amount of interests compounded!
I always advise younger couples to examine their ability to buy expensive HDB flats. The REAL affordability would be a 15 year mortgage with a cash payment of 10% of your take home pay (both couple) along with your CPF contributions. This will be an ideal situation whereby you pay very much less interests while not compromising on your quality of life. If not, the maximum number of years of mortgage you should take is only 20 years. Not 25 years nor 30 years. Else you will be living in falsehood of "affordability" while compromising on your retirement financing. Don't believe PAP when they tell you that HDB is affordable because you can take 30 years mortgage. That is utter rubbish!
Goh Meng Seng
*Article first appeared on https://www.facebook.com/gohmengseng.freedom/posts/10205206567896952