For John, working his office job for eight to nine hours a day is the only way he knows how to support his family. Family, for him, encompasses his ageing parents, his wife, and his two beautiful kids. For many people like John, this is the norm. They are called the Sandwich Generation.
Who is the Sandwich Generation?
The Sandwich Generation typically refers to working adults in their 30s and 40s who have to take care of both their ageing parents (the people who came before), and their children (people who come after).
They are hence, “sandwiched”, between two groups of people whom they have to take care of – the financial responsibility of making sure their elderly parents’ needs are met as well as providing a future for their kids.
What issues do the Sandwich Generation face?
Raising a child in Singapore is no easy feat. From food to clothes and even healthcare, every parent wants the best for their children and this can be expensive. Not to mention, the exorbitant cost associated with the education “Arms Race” that comes in the form of extensive tuition sessions and the wide variety of enrichment classes.
This is not the only financial baggage the Sandwich Generation carries. Many of the working adults also bear the responsibility of supporting their aged parents in retirement. With improved healthcare facilities, Singapore has topped the world in life expectancy – at almost 85 years. This also translates to higher healthcare costs as the Sandwich Generation has to support their aging parents over a longer period of time. In fact, some of the Sandwich Generation are continuing to support their elderly parents, having retired themselves.
A survey conducted in 2019 found that only 8% were confident in supporting both their retired parents and children. Faced with the financial pressures from both directions, many of the Sandwich Generation often struggle with their own financial planning.
Thus, many end up neglecting their own retirement planning. This can lead to a vicious cycle. For example, if John and his wife do not plan for their retirement, the burden of caring for them will fall to their children when they grow old and retire. The cycle continues and their children will be part of the next Sandwich Generation.
What can the Sandwich Generation do?
If you find the above familiar, you are probably part of the Sandwich Generation. However, fear not, as you are definitely not alone in this. Here are some things you can do to aid your situation.
A balanced lifestyle
While we all want the best for our loved ones, it is necessary to differentiate between needs and wants. Cutting down on the indulgences will also be beneficial. Whether it is choosing to dine in instead of a meal out at a restaurant, or going to a nearer destination for your vacation, these savings add up and can be beneficial to you in the long run.
Ensuring that you are well protected
Even the best budgeting can be unravelled by a diagnosis of a critical illness. Hence, it is essential to ensure everyone in the household is well insured against critical illnesses. However, this is easier said than done. Getting a policy for every member of the household can be a tiresome and costly process.
An option you can consider is a multi-generation critical illness plan that allows you to protect different generations in a family within a single policy.
Proper Financial Planning
As tough as it might sound, it is necessary to have adequate financial planning and budgeting. This includes planning for both yourselves and your loved ones. Good financial planning can not only help you cope, but also enable your children to break out of the cycle.
The cost of education can add up to a hefty sum. On average, depending on the course of study, a degree course in a local university can range from S$29,650 to S$146,750. This amount is way higher if your child pursues an overseas university education. Thus, it is essential to start saving early to ensure that you can afford the education expenses. You can explore low-risk options that allows you to systemically save up to hit a certain amount upon policy maturity, typically timed to when your child is ready for university education.
For yourself, having a financial plan for your retirement can help you stay financially independent when you retire. This will relieve your children from the financial baggage of providing for your retirement, allowing them to pursue their dream.
With continued advancements in healthcare technology, life expectancy is only going to increase. Coupled with inflation, your children are going to have an even more difficult time should the issue of Sandwich Generation be passed on.
This can be easily avoided. With the right protection and financial planning, you can ensure that you continue to be well supported even in your late years. There is a wide variety of insurance plans that you can tap on to ensure that you are the last Sandwich Generation.
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