Asked by Anonymous
Asked 4w ago
My hawker parents are in their early 50s, they have less than 5k cash savings. We live in an executive apartment (left 10 years of installment) and they have a car. While they have enough for daily expenses, they do not have a retirement plan (I believe that they think that I am their retirement plan). Am I responsible for their poor financial health? Am I doomed to be another sandwiched generation? What can I do to help myself?
This is a tough one, especially with the recent talk around the sandwich generation. Personally (this might not apply to everyone) - I feel that I want to be able to take care of them. My parents (in their 60s) don't have a retirement plan (mum has been a homemaker for the last few decades and dad earns a humble salary doing metal works), and in addition, they did not have insurance coverage until I got it for them in the last few years. My parents are not financially savvy, and in fact, I was scolded by my mum for buying insurance for her. Despite all the arguments, If I am not able to have that financial buffer for them, there is no way I would feel at ease. That said, I will always see how we can cut down at home. For example, I purchase family consumables such as toilet paper, washing powder etc, and in general, will look to be more frugal in terms of spending.
Top Contributor (Oct)
You don't owe them everything but you should be keeping aside 5% aside of your income for them in case something really bad happens to them.
They are your responsibility as much as you were their responsibility when you were young.
Speak to them about saving at least 20% of whatever they earn for themselves, but you need to make that small sacrifice of 5% for them as well. Put it into an annuity that will start paying when they turn 65.
I think you should speak to a financial adviser.
Now that they are in their early 50s, they can still get started now.
The more they plan, the lesser your worry in the future.
it's important for them to realise how much they actually need to retire in the future. Many don't start planning because they don't know how to.
Sounds to me like you dote on your parents' welfare yet run the fear of not being able to help yourself too. I do agree with some commentators on their suggestions on doing some future planning for yourself and them, consider your family's overall assets and liabilities, make plans for any shortfall, etc.
For an Asian society like ours, I reckon you provide some form of monthly allowance to your parents too whenever possible. You may want to consider having your parents do their LPA (Lasting Power of Attorney). Should any require your help to manage their assets such as the house and funds like bank accounts, you will need this important document to have access to their personal welfare coupled with property and affairs, the bank or CPF will not grant you access easily without the LPA, you will have to go to court to apply for a deputyship order.
If your parent treated you well and brought you up, why not? Maybe don’t have to go to the extent of a few thousand a month but maybe 500$ a month as an allowance to the family?
Top Contributor (Oct)
From a legal standpoint, the answer is "YES" - The Maintenance of Parents Act does put some responsibilities for children to be supporting their parents when elderly/in-need.
The details of the obligations below https://singaporelegaladvice.com/law-articles/maintenance-of-parents-child-obligations-how-to-file/ On a social/filial standpoint, really up to you and your relationship with parents.
Best of luck with it.
Run. Run as far as you can. Just kidding!
Was in, still am in a similar situation. My parents have since retired albeit, with less cash savings than I would like, the house is paid up, etc. Etc.
If you have siblings, this is a good time to split the load and commit to a joint account for family expenses like groceries, medical bills. Insure them for the shield, hospital plans. Etc. Chances are they don't have much in CPF so there's little point to contribute to it.
The thing about my parents is they handle money separately, figure out what their habits are like. Good or bad you should know but always be gentle when talking to them. My parents don't have a concept of investment so they never thought of it.
I feel like this makes for money to be a sensitive topic to my family and myself but that's life. Plan your own finances to include your parents, understand the payment schedules (insurance) and show them the amounts. Get them to take up part-time job/volunteering and stay active!!!
It's tough because you feel like you're perpetually at a negative net worth and you never chose your family background. But like any person with a growth mindset, which you should adapt and be - make this environment a lesson for yourself to learn and discipline yourself. Find a good job that pays well, spend only what is truly discretionary etc. Etc.
ALL THE BEST.
Logically you should not be responsible for your parent's financial problems and they should have taken care of their own finances but I also know that this is a common mindset among the older generation to rely on their kids for retirement.
I suggest you have a sit down with your parents and have a serious talk about finances. There is still time for them to implement solutions to help with their retirement. They can also choose to sell their car and/or downgrade their housing for starters.
Meanwhile, for yourself, you should definitely first set up a budget for yourself and strictly follow it Build up your savings and emergency funds. You can look at cutting out expenses that are not absolutely necessary.
Secondly, you can look for secondary streams of income to complement your main income and also start to invest your money to leverage it as much as possible.
Your parents are still young and there is still time to educate them on their finances. Don't give up hope it's still not too late
If you find it awkward to talk to your parents about this, feel free to drop me a message on my Facebook at facebook.com/jianhuicheung or my email at [email protected]
They were responsible for every action of yours, good or bad for the number of years you have been living. If you need to put a monetary value to how much you owe them. You can never pay them back.