Financial Planning While Supporting Elderly Parents

This post was originally posted on Planner Bee.

How can you care for your elderly parents without putting your own financial future at risk? This is something many adults in Singapore do as they take on the responsibility of caring for ageing parents.

Caring for elderly parents is a meaningful commitment, yet it can bring considerable financial and emotional strain, especially with increasing life expectancy and living costs. Many people struggle to balance supporting their parents with managing their own goals, such as buying a home, saving for retirement or raising children.

Here’s how you can strike that balance without compromising your financial health or your parents’ quality of life.

Start with a conversation

The first and often most difficult step is to have an honest and open conversation with your parents. Talking about money with your parents may feel awkward or even taboo, but it’s an important part of planning for their care.

When you sit down with them, aim to cover the key areas with empathy and respect, especially if they are not used to discussing finances. These areas include:

• Current income and expenses: What money comes in and what goes out each month?
• Debts or financial obligations: Are there any outstanding loans or recurring payments?
• Insurance coverage: What health or long-term care policies do they have?
• Health conditions and care plans: Do they have any existing health issues? Have they made plans for future care needs?
• Assets and savings: This could include CPF accounts, retirement funds, pensions or other investments.

One common mistake is to criticise their past financial choices. This can make them defensive and end the conversation early. Remember, your goal is not to critique, but to understand their needs and identify any potential gaps where your support might be necessary.

Assess your financial capacity

Just like you’re told to put on your own oxygen mask first on a plane before helping others, the same idea applies when offering financial support to your parents. Before extending financial assistance, take a good, honest look at your own finances.

Many adult children offer support out of love or cultural obligation without realising the long-term consequences to their own financial well-being. While the instinct to help is admirable, doing so at the cost of your own stability can cause problems later for both you and your parents.

Ask yourself these critical questions:

• Do I have an emergency fund that covers at least three to six months of expenses?
• Am I consistently saving for retirement?
• Do I have outstanding debts that need to be prioritised?
• Can I support my parents without sacrificing my financial stability?

If you’re already struggling to meet your personal financial goals, giving large amounts of money may not be wise or sustainable. In this case, offering emotional support or helping to manage their care in other ways could be a more practical and responsible choice.

Building a joint financial strategy

Once you have a clear picture of both your own and your parents’ finances, the next step is to create a practical plan together. Here are some strategies that can help you move forward effectively:

1. Prioritise needs over wants

Start by separating essential costs from non-essential ones. Important expenses include housing, medical care, caregiving, and utilities. Non-essentials could be things like holidays or dining out. Your financial help should go towards what matters most for your parents’ well-being.

2. Maximise government and community support

In Singapore, there are several schemes and services to help seniors. Make sure your parents are making full use of these before using your own money. Some useful options include:

1. The Silver Support Scheme offers quarterly cash payouts for low-income seniors aged 65 and above.
2. ElderShield and CareShield Life offer long-term care insurance to support those who become severely disabled.
3. CHAS and MediSave help to reduce medical expenses by offering subsidies for healthcare costs.
4. The Pioneer Generation and Merdeka Generation Packages give additional healthcare subsidies to eligible seniors, helping to lower their out-of-pocket expenses.

These programmes can ease the financial load and reduce the need for personal funds.

3. Top up your parents’ retirement fund

Contributing to your parents’ retirement fund is a meaningful way to support their financial security in their golden years. One effective way to do this is by topping up their CPF Retirement Account using cash or your own CPF savings.

To further ease the burden, you can tap into the Matched Retirement Savings Scheme (MRSS), where the government matches cash top-ups dollar-for-dollar (up to S$2,000 per year) for eligible seniors who have not met the Basic Retirement Sum.

This increases your parents’ monthly payouts without fully draining your own resources.

Read more: A Comprehensive Guide to the Matched Retirement Savings Scheme

4. Share the responsibility with siblings

If you have siblings, discuss how to divide responsibility. One person might handle finances, another might focus on medical care, and someone else could give time and emotional support.

It’s important to aim for fairness, not strict equality. A sibling with a lower income may contribute more time, while one earning more could offer financial help. Play to each person’s strengths and abilities.

5. Budget for ongoing care costs

Caring for elderly parents often comes with ongoing costs such as medical bills, caregiving services, transportation, or home modifications. Planning ahead can prevent surprises. Consider these options:

1. Seniors’ Mobility and Enabling Fund (SMF): Provides subsidies for mobility aids and assistive devices like wheelchairs, walking frames, hearing aids, and home healthcare items.
2. Enhancement for Active Seniors (EASE): Offers subsidies for home modifications such as grab bars, ramps, and slip-resistant flooring.
3. Home Caregiving Grant (HCG): Provides up to S$400 per month (rising to S$600 from mid-2026) for families caring for seniors who need help with daily activities.

List all expected costs, separating regular and one-off expenses. A clear budget keeps things manageable and avoids stress later on.

6. Think about multigenerational living

Choosing to live with your elderly parents can be a practical and meaningful way to support them. It allows for better use of shared resources, lowers overall living costs, and helps build emotional closeness.

However, it’s important to plan carefully so that their needs and yours are both met. Setting clear boundaries, agreeing on daily responsibilities, and making sure you have time for yourself can help prevent stress and burnout.

With open communication and mutual respect, multigenerational living can become a sustainable and fulfilling arrangement for everyone involved.

Read more: Is CPF Life Sufficient for Your Parents’ Retirement?

Avoiding common pitfalls

1. Sacrificing your retirement savings

Many adult children dip into their retirement savings to help their parents. While the intention is good, this can be very risky.

Your retirement is your responsibility, not only for yourself but also for your loved ones. If you do not secure it now, your own children may face the same burden you are dealing with today.

Tip: Always make your own retirement savings a priority. You cannot help others if your own finances are not in order.

2. Co-signing loans or taking on debt

Some people co-sign loans or use credit cards to cover their parents’ expenses. These choices can damage your credit score and cause long-term financial problems.

Before taking on any form of debt, consider all possible alternatives. This could include making full use of government support, filing insurance claims or carefully reviewing and adjusting ongoing expenses.

3. Failing to set boundaries

Overextending yourself without clear boundaries can lead to resentment, exhaustion, and even financial instability. It is natural to want to help, but you need to decide in advance how much you can give each month.

Be honest and kind when discussing these limits with your parents. Setting clear boundaries protects your finances and allows you to keep supporting them without putting your own well-being at risk.

Planning for the future

Long-term financial care for your parents takes time and careful thought. Here’s how to plan for the years ahead:

1. Insurance planning

Ensure your parents have adequate health insurance. If they are not well covered or have no coverage at all, consider purchasing a private policy. The cost of insurance is usually far less than paying for medical bills out of pocket, especially in the long term.

Read more: How To Choose a Private Integrated Shield Plan

2. Create or update a Will and Lasting Power of Attorney (LPA)

Work with your parents to ensure their estate planning documents are in order:

• A will sets out how they want their assets to be shared after they pass away.
• A lasting power of attorney (LPA) gives someone the legal right to make decisions for them if they lose mental capacity.

These steps protect both your parents and you from unexpected legal or financial complications.

3. Consider hiring a financial adviser

A licensed adviser can help create a comprehensive financial plan that considers both your parents’ and your own needs. This plan may include budgeting, estate planning, investments, and insurance coverage.

Emotional considerations

Looking after ageing parents is not only a financial matter. It can also be emotionally challenging. Feelings of guilt, worry, frustration and love are common and normal. Here are some ways to care for your own well-being:

• It is important to acknowledge your feelings. It is natural to feel overwhelmed at times, and accepting these emotions can help you cope better.
• Make self-care a priority by looking after both your mental and physical health. Taking regular breaks and finding time to relax are just as important as your caregiving duties.
• Do not hesitate to seek support when needed. Joining a caregiver support group or speaking to a counsellor can provide guidance and comfort during difficult periods.
• Lastly, remember to celebrate small wins. Every positive step you take, no matter how small, is meaningful progress.

Conclusion

As parents grow older, the roles often change. Those who once cared for you may now need your help. Supporting your elderly parents while managing your own financial goals is one of adulthood’s biggest responsibilities. It takes honesty, planning and a willingness to have difficult conversations.

The aim is not just to provide money. It is to help your parents enjoy their later years with dignity while protecting your own financial stability and peace of mind. With careful planning and open communication, you can do both.