Ah, the Big ‘R’ word: Retirement. I’m pretty sure none of us want to work till we die. Yet, most of us rarely discuss our retirement plans. More specifically, we don’t talk enough about how to help our parents retire earlier in Singapore.
“What? Supporting parents’ early retirement? Is that even possible in Singapore?” I hear your incredulous cries. In light of the rising costs of living and the workaholic culture in Singapore, your concern is very much valid, In fact, Singaporeans work some of the longest hours in the world. Singapore is also the 3rd most sleep-deprived city according to a recent report. These statistics are just further testament to the workaholic culture in Singapore. Given these attitudes regarding work, it’s no surprise that many of us don’t think it’s possible for parents to retire early.
Although helping your parents retire earlier may seem like a far-fetched dream, it really isn’t. You just need to know the key steps to support your parents and secure their financial retirement.
Our parents have worked hard all their lives to provide for their family. They deserve a good retirement to unwind, and truly enjoy the fruits of their labour. While the task of helping your parents retire earlier in Singapore may seem monumental, it is not entirely impossible.
Interested to find out how you can help your parents retire earlier in Singapore? Here’s an easy 5 step guide you can attempt to support their retirement.
1. Get Your Parents to Start Thinking About Retirement
Yeah, I know: it’s a no-brainer. If you want to help your parents retire earlier in Singapore, you’ll need to get them seriously thinking about retirement in the first place.
However, this task is not as simple as just bluntly asking, “Eh, Ma. Eh, Pa. How are you planning for your retirement?” Traditional Asian families tend to be quite sensitive about money matters. Some older parents might even be quite elusive about their financial situations.
Moreover, retirement can be an iffy issue as it’s a stark reminder of one’s age. Nonetheless, it’s still important to broach the topic with your parents if you aim to help your parents retire earlier in Singapore.
Have an open conversation with your parents about retirement
If your parents are uncomfortable talking about retirement, it might be best to slowly ease into the conversation with them. Try to keep the conversation light and encouraging. Why not start the conversation by asking them if they’ve ever imagined how life would be like when they retire? Some parents might have been so consumed by work that they’ve never really paused to think about retirement.
It’s important to get your parents to envision life after employment. The more detailed the imagery the better. Ask them about their retirement goals. Would they like to travel the world? Or would they like to finally do that activity they’ve always wanted to try but just didn’t manage to find the time for? How about pursuing any other side gigs to keep themselves active? Help your parents draw a mental picture of their retirement. This will make them have a clearer idea of their goals. Moreover, this can increase their motivation to pursue their goals. Merely having a goal to retire earlier is half the battle won when it comes to helping your parents retire earlier in Singapore.
Besides implanting the idea of retiring earlier, you can also ask your parents to share about any fears they might have regarding retirement. Be open-minded and non-judgemental in the discussion. You and your parents should mutually agree on the best way forward to help your parents retire earlier in Singapore.
2. Understand Your Parents Current Financial Situation
Again, this is no easy task. Money tends to be a sensitive issue in the Asian household. However, this is an important step that you need to brace yourself for. For the sake of helping your parents retire earlier in Singapore, find ways to get them to open up about their financial situation. You should aim to learn exactly how ready your parents are for early retirement.
More importantly, knowing their current financial status will also inform you whether or not your parents are able to finance their ideal retirement lifestyle. For example, let’s say that your parents aspire to be avid globe-trotters upon retirement. Yet, a peek at their current savings account clearly shows that they cannot support such a lifestyle. Armed with this knowledge, you can now bring up this glaring gap between reality and desired goals with your parents. In turn, they can start to make tangible plans to reach their goals. This will greatly help your parents retire earlier in Singapore.
We’ve established that a direct “How much money do you have now, Mum?” is probably not the best way to broach the topic with your parents. Not to worry, there are a few alternate ways to get a general sense of their current financial situation.
Ask about your parents’ CPF money
Checking your parents’ CPF account is an easy, and actually a pretty accurate way to gauge how ready your parents are for retirement. If you’re unsure of exactly what constitutes a healthy CPF account, you can use the CPF LIFE Calculator.
Check if your parents have any outstanding loans
It is important to know if your parents have any outstanding debts that they need to pay. This would allow you to draw a more accurate picture of their financial status. Consequently, this will help you better plan for their future. Furthermore, you could also help to ease their financial burden by contributing a little money to offset those loans.
3. Insure Your Parents
Insurance is of paramount importance when it comes to helping your parents retire earlier in Singapore. With no stable income upon your parents’ retirement, it is important that they have proper insurance to buffer against any unexpected problems that life may throw at them.
We often push the thought of illness to the back of our minds. This is understandable, given how inherently awful such thoughts make us feel. However, it’s time we face those worries head-on. As our parents age, it is inevitable that they become increasingly vulnerable to illness. To help our parents retire earlier in Singapore, healthcare insurance is important to ensure they can enjoy their golden years without being shackled by financial burdens.
Luckily for you, the government’s basic health insurance, Medishield Life covers all Singaporeans. Interested in a more extensive coverage? A quick google search easily reveals a few well-known insurance premiums. You can consider these premiums on top of Medishield Life. There’s a lot of information on the web, so I’d recommend taking your time to read up on the various premiums. It might be good to do a comprehensive comparison across the various options before choosing the premium(s) that best suit your parents’ needs.
For more information on health insurance to take, check out 5 Key Types of Health Insurance in Singapore To Consider Getting.
4. Help Your Parents Save
It goes without saying that in order to help your parents retire earlier in Singapore, they’ll need to save! Here’s how you can support your parents in saving for retirement in Singapore.
Help to pay for their essential expenses
Household expenses like utility bills can actually take up quite a bulk of your parents’ monthly expenses. Moreover, these monthly bills are fixed expenses that they can’t really scrimp on. (I mean, unless they live like absolute cavemen without electricity… Pretty much impossible, if you get my drift.) So, if you have the means, why not help to pay for these fixed monthly expenses? The extra money can go a long way to support your parents early retirement in Singapore!
Change their living accommodation, if needed
Do your parents really need to live in that 5-room flat, if it’s just the both of them? Besides the ridiculously underused spaces, this extra space could actually be eating away their savings.
Have an open discussion with your parents to see if their current accommodation is suitable for them. If they’re open to the idea, why not consider moving house? They can sell their existing house for a decent profit. At the same time, they can move to a cosier house which is more suited for their current needs. The net proceeds can supplement your parents’ retirement funds. Viola!
Enroll your parents in CPF Life
CPF Life is a new retirement scheme recently rolled out by the government. This new scheme guarantees payouts for life. In comparison, older schemes had payouts that would ultimately be depleted. You don’t have to be a financial expert to know that CPF Life is a much better deal than the earlier schemes!
Yippee! The government automatically enrolls everyone born after 1958 in CPF Life. So, you don’t need to take any action on your part if your parents are born after 1958. However, if your folks are born before 1958, you can opt them into this scheme.
5. Help your parents age healthily
Sure, having the financial means to retire is important. Indeed, the earlier 4 tips are mostly related to how you can prepare your parents financially to help your parents retire earlier in Singapore. However, a happy retirement for your parents requires much more than just money. Specifically, are your parents healthy enough to enjoy their golden years?
Your parents’ physical and emotional health is just as important in your quest to help your parents retire earlier in Singapore. Help your parents age gracefully so that they can enjoy their retirement. You can help promote an active lifestyle by introducing your parents to new exercises and hobbies. Additionally, you can also introduce your parents to various interest groups. Here, they can meet new friends and stay engaged in society.
No-one wants to work forever. “Hey, but I don’t mind working forever!” You might quip. Sadly, the truth is, companies are also probably not keen on employing you forever. Retirement, like it or not, is a reality that will arrive for most of us. So, why not plan ahead and help your parents retire earlier in Singapore?
Have you tried out some of our tips to help your parents retire earlier in Singapore? What worked and what didn’t? Let us know in the comments below! Her are some more finance tips to support you in becoming more financially savvy.