In Singapore, many of us have the habit of giving our parents a small sum of “allowance” after we start working. After all, it’s only a small gesture of gratitude for their many years of blood and sweat for bringing us up.
When we hit our 30s or early 40s, our individual financial situation usually changes. It’s the age where we probably start to get married, form our own family and buy our first property.
Increasingly, we have more financial commitment. This might coincide with the time where our parents are nearing their retirement.
Depending on your parents’ occupation before they retire, they may have enough for their retirement to not rely on you.
Many may not.
With so many financial responsibility on your shoulders, would you be able to provide for them in their retirement?
Since this will be an eventuality, wouldn’t it make more sense to be ready for when it happens? Here are 5 things you can do to help support your ageing parents financially without over-stretching yourself:
1) Ensure They Have Enough Insurance Coverage
Not only should you look into your own insurance coverage, you might want to find out what your parent’s current insurance coverage looks like. It may be pretty expensive for them to take up a new policy now, but it’s better than nothing.
Set up an appointment with their agent to do a thorough assessment and help your parents get themselves adequately covered.
2) Top Up Their CPF Retirement Account
Some parents may not be ready to accept your cash gifts, or may feel that they are too “young” to get ready for retirement. What you can do is to help them top up their CPF.
Topping up their CPF means they get better interest rates compared to saving the money in a bank, and it also allows you to enjoy up to $7000 of tax relief!
3) Split The Bill With Siblings
Even if you are the big brother of the family, your siblings have benefitted from your parents’ upbringing as well. Get them to share in the cost of your parents’ retirement.
This isn’t about being fair and square, but about sharing responsibility and risks.
You can’t afford to be the sole breadwinner in your own family as well as for your parents. It doesn’t have to be the same amount of contribution but everyone should contribute.
For instance, if your younger sibling has just started work and still stays at home with your parents, get him to perhaps pay off the utilities or pick up the grocery tab.
4) Start Taking Action Early
Many people brush aside the retirement issue because they always think of it as something far down the road. However, we all know that the time will come eventually.
Besides planning for our own, we might want to think about our parents as well. It pays to start early – set up a separate account where you can save a small amount of money each month as emergency cash for your parents’ future.
This amount of money should be used to help them with emergency needs.
5) Look Out For Savings/Discounts For Elderly
Being either part of Gen-X or Gen-Y, you are likely to be more aware of government schemes that provide discounts for the elderly.
Help your parents apply for them.
Some of these include the CHAS subsidy scheme for pioneers which will allow the pioneer generation to receive subsidized rates for healthcare, special discounts at supermarkets and free health screenings.
Taking care of your parents can be an additional financial load for you, but if you take the necessary steps to be prepared for it… you’ll do fine!