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Understanding Financial Planning of Singapore’s Sandwich Generation

Last Updated on January 10, 2024 by Parentology

The term “sandwich generation” often crops up in conversations about financial challenges in Singapore. So, who exactly does this term refer to and what are the specific challenges they face?

Imagine you’re a working professional, juggling the financial needs of both your children and aging parents. If this describes your situation, then, unfortunately, you’re ensnared in the complexities of the sandwich generation.

Of course, supporting one’s children is a universal parental duty. Every parent is inherently bound to the commitment of providing for their offspring.

Yet, the landscape in Singapore presents unique challenges. A combination of specific local factors has spurred the rise of the sandwich generation, defined by working professionals simultaneously supporting their dependent elders.

The swift economic ascendancy post-war has seen living costs surge, often outpacing the savings or Central Provident Fund (CPF) provisions that many elderly had set aside. Furthermore, the previous generations were often so engrossed in meeting daily financial demands or prioritizing their children’s education, they overlooked the importance of robust retirement planning.

Singapore’s deep-rooted cultural emphasis on filial responsibility further compounds this. The ethos of caring for our elderly is deeply embedded in the societal fabric. Couple this with a dwindling birth rate and a commendable surge in life expectancy, and you’re met with a scenario where aging parents are living longer lives but relying on financial support from a lesser number of offspring than before.


Navigating Dual Pressures: The Dilemma of Singapore’s Sandwich Generation

The hallmark of the sandwich generation is an ever-mounting pressure, spanning both the financial and personal fronts.

Living in Singapore, raising a family doesn’t come cheap. Beyond the basic necessities of food, clothing, and shelter for their children, parents are grappling with skyrocketing expenses like childcare, tuition, and the myriad of extracurricular activities children nowadays participate in. And that’s without considering the occasional family outings or vacations.

Yet, that’s just one facet of the financial equation. A significant segment of Singapore’s working populace is also bearing the brunt of financially upholding their retiring parents.

To combat these economic strains, there’s a noticeable uptick in dual-income households. The modern challenge? Striking a balance between exhaustive work schedules and the simultaneous demands from children and elderly parents.

A prevailing solution among many is recruiting domestic helpers. While they provide indispensable support in child and elder care, it’s another expense added to an already stretched budget.

But what does this mean for the future?

Regrettably, amidst the fiscal challenges of upholding both the young and old, the sandwich generation’s own retirement planning tends to get sidelined. The ripple effect? Their eventual retirement may necessitate reliance on their children’s support, perpetuating this cycle.

It’s an alarming predicament for the up-and-coming youth – let’s dub them the ‘Sandwich Generation of 2030.’ Recent surveys depict a bleak outlook. A mere 20% of Singaporean youngsters feel their parents possess ample retirement savings, while a staggering two-thirds of parents anticipate outliving their reserves. Furthermore, only a paltry 8% of the youth expressed confidence in supporting their parents’ post-retirement, with 70% certain they’d have to recalibrate their lifestyle to provide adequately. A concerning 47% felt financially ill-equipped to support their parents during unpredictable contingencies.

If today’s youth aspire to start families, they’re likely headed for the sandwich generation’s predicament unless their parents act now to robustly plan for retirement.

Given these dynamics, it’s pivotal for the present sandwich generation to astutely select retirement plans. These must not only fit their budget but also effectively augment their savings, ensuring they lead the quality of life they envisage in their twilight years.


Navigating the Sandwich Generation: Strategies to Consider

Realize that if you’re nestled within the sandwich generation, you’re not navigating these challenges in isolation. There’s solace in shared experiences. Here are some proactive steps to make your journey smoother:

  1. Prioritize Work-Life Balance: Opt for employers who emphasize family values, granting you the latitude to unwind and cherish family moments, mitigating the everyday pressures you face.
  2. Champion Well-being: A wholesome diet and regular physical activity aren’t just buzzwords. They’re essential to ensure that you and your family stay at the pinnacle of health. Complement this by securing comprehensive health insurance, shielding you from unexpected medical expenses.
  3. Embrace Prudence: Whether it’s selecting budget-friendly vacation spots over lavish ones or moderating those fancy dinners, judicious everyday decisions can culminate in significant savings.
  4. Foster Financial Awareness: Encourage your children to grasp the essence of money. Equip them with skills like price comparisons before purchases, fostering financial astuteness early on.
  5. Safeguarding Seniors: Educate your parents on discerning scams. Safeguarding their retirement pool, and by extension, your finances, is crucial.
  6. Initiate Retirement Planning: The time to break the ‘sandwich cycle’ is now. Lay down the groundwork for a self-sufficient retirement, alleviating your children from potential future burdens.
  7. Set Boundaries: Understand that occasionally, turning down requests, be it from your children or parents, isn’t an act of denial but a longer-term strategy for the family’s well-being.
  8. Invest in Sound Financial Instruments: Proper budgeting and retirement planning are paramount. Products like endowment plans offer insurance savings with benefits such as guaranteed capital return after the premium term, alongside lifelong cash payouts. Tailored to your financial aspirations, it offers flexible premium terms and payout options, bolstering your retirement plans.
  9. Legacy Continuation: By designating a loved one as secondary insured3, you ensure that your policy endures, even in unfortunate circumstances.

Prepping for retirement doesn’t just cater to your peace of mind. It’s a beacon for your child to chart their path, steering clear from the sandwich generation’s confines. Dive deeper to understand how you can seal your legacy as the last link in your family’s sandwich generation chain.

The challenges faced by the sandwich generation are multi-faceted, but with the right strategies and tools, they can be navigated successfully. Proactive financial planning is not just about personal comfort; it’s about ensuring the future wellbeing of both preceding and succeeding generations. Don’t leave your future, and that of your loved ones, to chance.

Connect with our financial advisor today to pave a solid path towards a secure and fulfilling retirement!


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