You will be able to set out what your children, your parents and your own future each need from your household.
When you support your parents and your children at the same time, put your own retirement saving into the budget as a fixed line that you do not touch. Then keep the regular allowance you give your parents separate from the one-off costs that come up around them.
On a Saturday morning, a couple in their late thirties drop one child at an enrichment class and take the other to a birthday party. Then they drive across the island to take a father to his polyclinic appointment and sort out his medicines for the week. In the car, one of them checks the banking app. The parents' allowance went out on the 1st, the infant care bill was paid on the 5th, and last month's CPF statement is still unopened. Behind all of it sits a question neither of them has had time to answer: are we saving enough for ourselves?
This stretch of life is often called the sandwich years. One household supports the generation above and the generation below at the same time, while trying to build its own future. In Singapore, people are living longer and many families are having children later, so a lot of couples end up here. This module is about handling the sandwich years without sinking your own plans.
Your money is pulled three ways. Your children need daily spending, childcare or school costs, and savings for later. Your parents may need a regular allowance, help with medical bills, and later perhaps a helper or care. You also need to keep building your own retirement, your CPF and your savings, because no one else will build them for you.
Each of these feels urgent in a different way. Your children's needs are in front of you every day. Your parents' needs come with a sense of duty, and often guilt. Your own future is quiet and a long way off, so it is the one most likely to be pushed aside.
People in this position are often tempted to put their own retirement last, or to assume they will catch up once the children are older. Some assume their children will support them the way they are supporting their parents. Relying on your children passes the problem down a generation. If your parents had saved enough, you might not be supporting them now. If you do not save enough, your children face the same squeeze twenty or thirty years from now, when they have their own children and their own parents to support. Building your own retirement is one of the most useful things you can do for your children.
None of this means neglecting your parents or your children. It means your retirement saving goes into the budget as a fixed line that is not raided. Treat it like a bill you pay every month. If you only save what is left at the end of the month, the other two demands will usually have used it up.
Support for parents comes in two shapes, and it helps to keep them apart.
A regular allowance is a fixed amount you give your parents each month, paid on a fixed day. It is predictable and easy to budget for, and it lets your parents plan their own spending. Many Singaporean children start giving their parents an allowance from their first job onwards.
One-off costs are irregular, sometimes large, and often arrive with little warning. They include a hospital bill, new spectacles, a fall that means the home needs modifications, a few weeks of home care after an operation, or the deposit for a helper.
If the allowance creeps up every time a one-off cost arrives, your budget loses track of what you are actually giving each month. If one-off costs are paid from whatever happens to be in the account that month, they eat into your savings, or they fall on whichever sibling answers the phone first. Paying one-off costs from a separate care fund lets the allowance stay stable. Lesson 5.4 shows you how to set up that fund.
You cannot plan your support without knowing what your parents have and what they might need. Many adult children do not know this. Asking can feel awkward, and some parents would rather not say.
Hui Min and Daniel know much less than they thought. Hui Min's father drove a taxi for most of his working life, and she has no idea what is in his CPF. Daniel's mother turns sixty this year, and he knows she has a hospital plan but not which one.
For each parent, try to find out these five things:
Income: a pension, CPF payouts, rental income, work, or support from your siblings. CPF: roughly what is left, and whether they receive monthly payouts. Insurance: MediShield Life only, or an Integrated Shield Plan on top, and any other policies. Health: long-term conditions, the medicines they take, and how often they see a doctor. Housing: whether they own their flat, whether a loan is still outstanding, and whether the flat will suit them as they age.
Writing down what you do not know is as useful as writing down what you do know, because the gaps tell you which questions to ask.
Start a short note on each of your parents. For each of the five areas, write what you know and, just as usefully, what you do not know yet. Those gaps are the questions to ask on your next visit.
Write one paragraph on each parent's money situation, and note what you do not know yet.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).