You will write a plan for your home and care in later life, with costs to check.
Housing and care are the two parts of a retirement plan most people leave vague. "We'll see" is a common answer to both. This exercise replaces "we'll see" with a short written plan: what happens to your home at 65, 75 and 85, what care might cost, which schemes to check, and who you are relying on. Then it puts those costs into your drawdown map, so you can see whether the plan still holds.
Allow about thirty minutes. Have your drawdown map, your notes from lessons 6.1 to 6.3 and the HDB, CPF and AIC websites open. Jasmine's figures are all made up.
For each of 65, 75 and 85, write one or two sentences: where you expect to live, whether the home pays you anything, and what would make you change course.
Jasmine's version:
At 65, she stays in her four-room flat. It is paid off, close to Megan and near her clinic. She keeps the option of renting out her spare room as a backup, to be used only under the trigger she set in lesson 5.4, Run your plan through three scenarios.
At 75, she plans to sell and right-size to a smaller flat, ideally near Megan. In this example, she estimates about S$250,000 of cash after costs and after the refund of CPF used for the flat to her CPF accounts. She notes the conditions for HDB's right-sizing schemes and the Lease Buyback Scheme as things to check at 73, because the rules may change by then.
At 85, she expects to be in the smaller flat, possibly with a live-in helper. If home care stops being safe, her fallback is a nursing home close to Megan.
For each care arrangement in your plan, write the yearly cost at today's prices, the subsidy or insurance you expect to offset it, and where you will check both.
Jasmine's care line: from 85, a live-in helper with some home nursing, about S$3,000 a month at today's prices, less about S$1,000 a month that she expects from CareShield Life and a subsidy. Her own cost is about S$2,000 a month, or S$24,000 a year, at today's prices.
Her list of things to check, with the source for each: CareShield Life benefit and eligibility on the CareShield Life website; care subsidies and caregiver support schemes on the AIC website; MOM's rules for employing a helper to care for an elderly person; MediSave use for long-term care on the CPF website; and HDB's right-sizing and lease buyback conditions.
Open your drawdown map and add two things: a care cost column, and a one-off line for any cash your home releases.
Grow the care cost from today's prices to the year it starts, then by inflation every year after. Jasmine's S$24,000 a year at today's prices becomes about S$50,000 a year at 85.
Add the home sale proceeds as a one-off amount in the year you expect to sell, flowing into your investments or your cash bucket.
Then read the result, first with care costs alone, then with both.
Jasmine's map with care costs from 85 and no home sale: her savings are about S$1,131,000 at 85 and S$638,000 at 90, and her money runs out in the year she turns 95. Care took her from comfortably reaching 95 to failing at the finish.
With the home sale at 75 as well: she reaches 95 with about S$565,000 left. The right-sizing more than pays for ten years of care in her plan.
She tested one more version. Without selling, but halving her flexible spending from 85, when she expects to travel little anyway, she reaches 95 with about S$114,000. That works, but with almost no margin.
Write down how the change moved your result. In Jasmine's case: care alone ends the plan at 95, care plus right-sizing leaves about S$565,000.
Her map leaves out the lower running costs of a smaller flat, such as lower conservancy charges and utilities. That makes the result slightly cautious, which she is happy with.
Every care plan relies on someone. Write their names and what you are counting on each to do.
Jasmine's list:
Megan, to help find and supervise a helper, check in weekly and act as her main contact with doctors Ryan, to share decisions with Megan and help with paperwork when he can Her brother, to share the cost and the visits if their mother needs full-time care first Leong, to visit and help, though in law he has no say unless she names him in her LPA
Then check that each person knows. A plan that relies on someone who has never been asked isn't a plan. Jasmine has spoken to Megan. She has not yet spoken to Ryan or her brother, so their names have a note beside them with a date.
A finished housing and care plan fits on one page. It states the plan for your home at 65, 75 and 85, the care arrangement and its yearly cost at today's prices, the schemes to check with the source for each, and the people you rely on. Under it sits one line from your drawdown map showing the age your money lasts to with these costs included.
Write your own plan now, add its costs to your map, and see where the money lasts to.
Write the plan, add its costs to your drawdown map and note how the change affects the age your money lasts to.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).