CPF savings insufficient for retirement: survey

[kazukirai]

I may be missing something, but I dont understand why the government keeps using the phrase "your HDB flat is an asset".

If you cannot derive income or monetise its value (other than selling it), how is it an useful asset?

I think the way to answer this question will be to ask, "What type of asset is this?"

Joshua Kennon at about.Investing: Investing for Beginners divides Assets into 6 types (full article here)-

Asset Type #1: Those that generate high returns on capital, throwing off substantial cash on very little capital investment but that can be grown by reinvesting profits into the core business for expansion.

Asset Type #2: Those that generate high returns on capital, throwing off substantial cash on very little investment but that cannot be expanded by reinvesting in the underlying asset.

Asset Type #3: Those that appreciate far above the rate of inflation but generate no cash flow.

Asset Type #4: Those that are "stores of value" and will keep pace with inflation

Asset Type #5: Those that are "stores of value" and will keep pace with inflation but have frictional costs such as storage requirements, maintenance, et cetera thus turning them into liabilities in that they require cash out of your pocket from time to time.

Asset Type #6: Consumer goods or other assets that depreciate rapidly with little or no resale value

As MW and aspeed have already mentioned, it's useful to think of how you can monetize the HDB (e.g. renting out a room or HDB's own reverse mortgage scheme) and also bear in mind op cost (for most people that don't own their home, camping at Changi Beach isn't the go to option, instead, renting or free-loading is the more likely option)

So, thinking along those lines, you can decide which type of asset a HDB flat will fall into. Read the full article by the way, there's a lot more description and examples as to what each asset type is.