Key Eldercare Stages: Financial Planning Considerations

Are you part of the sandwich generation? Learn more about key eldercare stages and financial planning considerations to help you support yourself, your children and parents.

As lifespans in Singapore continue to increase1, chances of living to a hundred years old is a real possibility for many. However, longer lifespans also mean higher costs, which is why proper financial planning for yourself and your parents is increasingly important.

According to a recent study by Prudential, Singaporeans have mixed feelings about their future when it comes to health and financial prospects after the pandemic. The interviewees, aged between 25 and 74, revealed that despite the pandemic, most felt optimistic about their physical health. 31 per cent felt prepared to reach 100 from a health perspective, but only 29 per cent thought they could financially afford to live to that age.2,3

Retirees and those who are approaching the end of their working life need to reassess their financial plans such as their pensions, health insurance and life insurance. You may need to help your parents to reassess their coverage and update their plans to secure protection in their later years.

Stages of eldercare

Depending on the physical and financial situation of your parents, they can be placed in different stages of their eldercare journey. The three key stages of ageing4 have unique requirements, costs and grants.

1. Independence

At this stage, your parents will still be capable of managing their day-to-day needs. This is a good time to talk to them about their finances, preferences and future needs (such as their health and protection coverage) to help them plan ahead and prepare for any health or financial crises.

One available source of income that your parents can explore would be The Lease Buyback Scheme. Introduced by the Government, this enables eligible HDB homeowners to sell part of their lease to the Government, giving them a lifelong monthly income.5 Alternatively, people can enjoy a Silver Housing bonus for downsizing their HDB apartment.6 For seniors with low incomes during their working years, the Silver Support Scheme provides a quarterly cash supplement.7

It's also important to encourage your parents to remain physically and socially active to ensure they enjoy the best of their golden years.

2. Interdependence

At this stage, your parents may need help with certain activities such as their finances, shopping, or transport. They may not need professional help, but may need more of your time.

Between 2023 and 2025, all seniors over 55 will enjoy a S$450 MediSave top-up, while lower-income citizens over 55 will receive a S$600 to S$900 GSTV senior bonus.8 Grants that help with home modifications and mobility assistance can be found here.

3. Dependency

At this stage, seniors will struggle with everyday mental or physical tasks and may need professional help, such as a domestic worker or full-time care. This stage is usually less dependent on age and more dependent on medical progress. This could incur major expenses.

There are available grants for those eligible to train a care-giving domestic worker.

How to prepare your parents for their eldercare journey

Before you take action to prepare and plan for your parents’ eldercare journey, you should sit down and have a discussion with them to understand their policies, financial situation, and possible gaps in their finances. You can also find out about their wishes on potential care if and when needed.

It’s a good idea to have this discussion with your siblings so that everyone is on the same page and can help out where needed. You can also check your local Social Service office for eldercare support.9

Next, speak with your financial consultant about the coverage or gaps in your parent’s retirement and future protection. You should also research and leverage on available grants and promotions to help with cost management. As a Prudential Ascend customer, you can enjoy discounts on a number of eldercare services.

And finally...

As you plan for your parents' retirement and eldercare, consider planning early for your own retirement and eldercare journey too. The sooner you plan for it, the easier it will be when you reach your own golden years of freedom. Talk to your financial consultant to start building a healthy nest egg.

This article is for your information only and does not consider your specific investment objectives, financial situation, or needs. We recommend that you seek advice from a distributor duly appointed by Prudential before committing to purchase a policy.

The information is accurate as at 17 May 2022 unless otherwise indicated.