As a parent of a young child, you care for your little bundle of joy day and night. You worry about your child’s health, education, and overall well-being. You selflessly pay exorbitant fees for music lessons or enrichment classes. Probably you are saving for your child’s college tuition fees too.
The furrows on your forehead are a testament to all the sacrifices you have been making for your child. After all, you want to make sure that your child faces a great future ahead. That is the best gift you can give as a parent—or so you think.
Try instead to look at it this way. Do your responsibilities end once your children have gone through college and started their professional lives? Not really. Your responsibilities towards yourself and your spouse still remain and if you are not able to fend for yourself and meet your own living expenses, your children will worry about you. Your financial readiness for old age, therefore, is crucial for the happiness of your children.
Trust me, I too used to think in the old-fashioned way. But when I watched this video, it not only gave me goosebumps, but it also totally changed my perspective on retirement.
Watch this video and you, too, will see saving for retirement in a different light:
The fact is that once your children grow up, they will fly the coop. What about your own life as an empty nester? Will you have enough saved for your retirement? How will your children be affected if they have to support you financially through your retirement years?
Tuition Fees or Retirement Savings?
A lot of parents make this mistake.
They make it an “either or” choice: You either fund your child’s education or you save for your retirement.
It is quite an Asian way of thinking to give everything to our kids until they are set in their lives. If this means we don’t get to save for our retirement, then so be it! According to a Nielsen research commissioned by NTUC Income, 90% of parents surveyed in Singapore are willing to give up their retirement savings for their children’s education and development needs.
But you don’t have to sacrifice making plans for your retirement savings so your kids can go to expensive enrichment centres or college. You can be exploring other more creative ways or having honest conversations with your children around their interest and development needs in order to yield win-win outcomes for the family too!
Moreover, there’s no guarantee your kids’ aspiration will lead to college. But your retirement is coming for sure—and it is coming sooner than you expect!
Your Needs Before Your Kids’ Needs
Your kids can apply for scholarships and grants to fund their university education, but how will you financially cope with your retirement years, considering you have no savings to fall back on and life expectancy rates are on the upward swing? Borrowing or loaning money for your retirement doesn’t seem to be a sound solution.
In fact, the survey reveals that Singapore youths are concerned about this issue. Just 20% of the youth surveyed believe that their parents can live on their personal savings for retirement. 66% of the youth surveyed factored in the cost of looking after their retired parents and only 8% of them were very confident of supporting their parents financially. And they are so worried about it that 70% foresaw downgrading their lifestyle. 44% even expect to make career-related sacrifices to support their parents.
So you need to take care of your own financial needs first before you can help your kids. No parent wants to end up becoming a burden on his or her kid in the long run.
In fact, your kids want you to save for your own retirement. Statistics make it clear: 80% of surveyed youths agree that parents should save for their retirement and spend less on tuition and enrichment fees.1
Not being able to pay for your child’s fancy tuition fees, or not providing a foreign degree for him or her, does not make you a bad parent. There are other ways to help your child.
Remain involved in the college application process, and they can always benefit from your support and wisdom. Give of yourself – your time and your love. These things don’t cost money, and are far more valuable.
It’s time to turn conventional logic on its head. Not all of us are Crazy Rich Asians. As a parent, you don’t have to sacrifice your own financial future to empower your children to be future-ready.
Moreover, the best gift you can give to your children is a secured future for yourself. When you achieve that, your children won’t have to worry about you or sacrifice pursuing their passions and dreams, and together you can both enjoy the life that you helped build for them.
1Nielsen research commissioned by NTUC Income