You will be able to weigh giving money during your life against leaving it in your estate.
Megan and her husband have just been offered a BTO flat, and the down payment and renovation will stretch them. Jasmine would like to help with S$50,000, a made-up figure for this example. Her reasoning is simple: they will inherit most of what she has anyway, so why not give some now, when it helps most and she can see them enjoy it? Then she thought about Ryan, about her own care in thirty years, and about whether her drawdown map would still hold.
Giving during your life and leaving money in your will are two ways of passing on the same wealth. This lesson weighs them and shows how to check that a gift doesn't undo your own plan. It is education, and HDB, CPF and a lawyer can confirm the rules for your situation.
Gifts during your life have real advantages. The money arrives when it helps most, often in your children's thirties, when housing, young children and careers all compete for cash. You see it used, and you can talk about it. And it moves money outside your estate, so it doesn't wait for probate.
The cost is that the money is gone. A gift can't come back if markets fall, if you live to 100 or if you need care. Your retirement plan was built on the assumption that your savings would pay for you for as long as you live. Every gift reduces what is left to do that job.
There is also a quieter risk. A gift made in a good year, from a portfolio that has just risen, can look affordable and turn out not to be if a bad decade follows. The test is never whether you can afford the gift today. It is whether your plan still holds through the scenarios in module 5 after the gift is made.
Put the gift into your drawdown map as a one-off withdrawal in the year you plan to make it, then rerun your central case and the scenarios that matter most.
Jasmine put her S$50,000 gift in the year she turns 61.
In her central case, with no care costs, she still reaches 95, with about S$434,000 left instead of S$710,000. The gift itself is S$50,000, but the end balance falls by nearly S$280,000, because that money would have grown for thirty-four years.
With her care costs from 85 and her plan to right-size at 75, both from lesson 6.4, Write your housing and care plan, she reaches 95 with about S$289,000 instead of S$565,000. That still works.
With care costs but without right-sizing, her money runs out at 93. The gift is affordable only if she follows through on the move she planned.
She also tried a larger gift of S$100,000. Without care costs, she would reach 95 with about S$158,000. With care costs and no right-sizing, her money would run out at 92.
So she settled on S$50,000, with a note in her plan that right-sizing at 75 is no longer optional, and that she will check the plan again before making any further large gift.
Help with a home has its own rules, because HDB eligibility, grants and CPF all come into it. How you help changes the outcome.
A cash gift is the simplest: you give money and your child uses it. A loan is different, and if it is a loan, write that down with the terms, so there is no argument later about whether it has to be repaid. Becoming a co-owner of your child's flat is different again. It can affect your own housing eligibility, the grants they qualify for and how the flat passes on death, so check HDB's rules before agreeing to it.
Using your CPF for a child's flat is generally only possible if you are an owner, which brings the same complications. HDB also has grants for families who live near or with their parents, which may shape where your child buys. HDB's website sets out the current eligibility rules and grants, and your CPF statement shows what your own CPF can and can't be used for.
Gifts to one child and not another are one of the commonest seeds of family disputes. They come out at the funeral, when someone says "but you already got S$50,000 for your flat".
You don't have to give every child the same amount at the same time. Children have different needs at different moments. But you should decide how you want gifts treated and say so.
One approach is to equalise later. Your will can say that gifts made during your life count as an advance on a child's share, so the estate tops up the others. Another is to give the other child an equal sum when they need it. A third is simply to explain, in writing and in person, why one child received help and the other didn't.
Jasmine chose the first. Her new will will treat the S$50,000 as an advance on Megan's share, and she has told Ryan exactly that. He seemed more relieved by the conversation than by the clause.
The last check is the simplest. A gift should come from money your plan doesn't need. It should never come out of your floor, your cash bucket or the money set aside for care. If giving now means your bridge is thinner or your care plan relies on a sale you might not make, the gift is too large or too early.
Before the activity, list any gifts you are planning, with their size and timing, and have your drawdown map open to test them.
Write any gifts you plan to make, their size and the check that your retirement plan still holds after them.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).