Asked 2w ago
My parents are around 50-60 years old. They have no savings at all (only CPF, but they are not huge sum). They don’t earn much so it is difficult for them to save after paying off daily needs. They will not have money for retirement once they stop working. It is a very stressful situation for me as I constantly think of the financial burden that has yet to come come. What would you do now to minimise the anticipated burden if you were me?
I’m a fresh grad, drawing 3.5k per month. Tq!
I'm basically in a similar situation as you, and when I started I was drawing even lower than 3.5k, so getting my financials in place very early is damn impt. anyway, first thing I did was to check how much insurance coverage my parents had and how much was the monthly premium, imo healthcare and hospitalisation coverage is most important. I want to make sure we are not overspending it but at the same time get sufficient coverage with monthly/year premiums that I could afford. If possible, I cover their premiums entirely while try to budget their daily expenses with their CPF payouts. *If CPF payouts can cover daily expenses AND insurance premium, that's the best.
After that, save save and save more than usual. I have additional emergency funds that I keep untouched regardless of what happens that are reserved for my parents only.
At the beginning, balancing parents' insurance premium, parents' emergency fund, my own insurance premium, my own emergency fund was tough. This meant spending less on leisure and other discretionary.
After this, I bought into 1 retirement policy for myself, so I don't have to worry too much and simply focus on the now, while creating additional "margin of safety" for myself.
This took about 2 years, and after a while, when you built this safety net, you can ease up abit. I felt more at ease because at least now I can think more long-term, after settling the current.
Right now, with all these in place and some spare cash and getting used to my lifestyle and with proper budgeting, I can save for marriage, house, and have started to invest some of it so that next time my kids don't have to go through the same haha.
There will be trade-offs and sacrifices, namely luxury stuff, eating out often, travel, clothing, change phone etc. But I did what I had to do, and I know you can do it too. Jiayou!
btw, do you have student loan to payoff?
*pardon the grammar yah.
Hi, Im 3 yrs into the workforce. When started out im just like you in a similar situation, except that i have to pay my student loan. What i can advise is, build your emergency fund first. This shld include a 6 months to 1 year living expenses that you and your parents need, should you or yr parents be unable to work. After that you can top up their cpf, I assume just like my parents they hve not reached BRS, so interest rates would be higher. Given their age, i think this is good as CPF is literally risk free and you will not find btr interest rates elsewhere at literally 0 risk. On top of that, you may wish to give them allowance for them to save (since most elders feel safer with money in their bank accts) or u could choose to invest for them in a bond etf. If you have additional cash, can invest elsewhere for yrself. Most impt like what others mention, take note of your spendings, and cut down on the unnecessary, such as movies, bubbletea, cafes, clothes. These are wants, not needs. Live like that for few yrs and you will see some light at the end of the tunnel. Jiayou, you can do it.
Same situation as you (dad is solebreadwinner who doesn't earn much and mum is a housewife) and I am the only child. Was able to pay off school loan with dad's cpf and the partial scholarship. First thing I did after I started working was to ensure that their medical needs are covered, so I bought the necessary hospitalisation plans. You will have to balance between sustainability of premium vs claim limit (as being humans we would always want the highest possible but this will become really expensive when our folks get older). Next I looked at how we can optimise their cpf, and did top ups to allow the interest to compound, with aim to hit the basic retirement sum. We also did some transfer from my dad's cpf to my mum's account to ensure both are able to hit their BSR. Thankfully my parent's flat is fully paid, and hence they only need to meet a lower BSR back then. This helped to ensure that there's a source of payout when my dad stops working in future, and hopefully I can earn enough to supplement that and maintain their daily needs. And of course I also ensured that I am adequately insured just in case anything happens, they will have enough money to get by.
Medical coverage. First thing is to ensure your parents are covered down the road if there's any illness or unforeseen accident which requires hospitalization. Even a minor day surgery is covered by insurance ( pls always check with your doctor or financial agent)
Emergency funds. Start small and gradually build up as your income grows.
investment. Again start small and gradually expand your investment portfolio or increase the amount as your income grows. Even if it is $100 per month into a growth stock. Your future self will be thankful for this decision down the road.
Watch your parents diet and lifestyle. A lot of todays issue (HBL, diabetes, stroke, lack of exercise etc) has got to do with the type of food we eat and lifestyle choice. Being conscious of this helps to ensure your parents continue to stay healthy in their later years. Healthy parents = less stress for you = less stress on $$$
Income. Find ways to grow your income. Grow your skills, be willing to learn and bring value to your colleagues at work, step up for bigger responsibilities that could bring you invisibiity and promotion.
You only child? Next time, u marry at least 2.
Our parent generation never have education, thus low income. Earning $3.5k (take home $2.8k) when just graduate. No knowledge in investment. No sense for what i going to use for the $$$, only know want to have more.
But i inherited my parent frugalness & ruggedness. Working part-time job, even after graduate, all the way and saving all the way. Work when people working, work when people resting $100k before 30s, no problem. My parent retired at my 30, i take care, no problem.
Only after 30s, i start investing, because i run out of ideas to make money 😆. But i still continue what i doing, side hustle all the way. always try to double your money Still no red flag in my financial, so i guess i am doing right?
Anyway i just a normal graduate, with 9-5 job, not a high flyer. Never feel the burden, just do what you need to do. Just enjoy earning money. Earning for fun.
First of all, congratulations that you are ‘breaking the chain / cycle’. I believe you will teach your kids financial literacy.
Some important details are “do yo have any siblings”, “what’s your parents plan and expectation towards you and your siblings (if any), and “what’s your savings rate”.
I am not sandwich generation but I believe it is unwise for you to give too much allowance that at the end of the day, you don’t have enough for yourself. Saying “no” is hard, but sometimes, it may be necessary. And you may brief them don’t waste your allowance on gambling and stuff like that.
So you need to acknowledge the reality first, and budget and invest aggresively. (I have pursued this FIRE lifestyle too, To give you number, I am single, 27, my savings rate is about 60% a month, invested asset to net worth abt 75%).