The Art of Shifting Your Priorities on Savings

The next batch of the sandwich generation is here, and for them, retirement planning is going to be especially tricky.

This new sandwich generation of Singaporeans, aged 40-49, will need to work through unique challenges, particularly when it comes to their life's priorities. For one, they had children later in life, at an average age of 30 years old1.

These Singaporeans must also pay extra attention to the ever-increasing life expectancy in the country. Medical costs are going to rise2 with the increasing prevalence of age-related illnesses like type 2 diabetes and various dementias.

All this is framed by uncertain financial times and shifting cultural norms, where family is no longer the pillar of support for people in their old age. Relatively fewer Singaporeans3 are expecting their offspring to take care of them as compared to their predecessors.

How To Adapt Your Savings For Your Dependents

The most important question to ask is, what does being prepared for retirement mean to you? Once you – ve figured out what you want for each of your dependents and clarify their expectations, you will gain a clearer vision of your own future and how to shift your priorities.

You might want to have an open discussion with your parents about what kinds of support they might need from you as they begin retirement. For example, consider whether you will take responsibility of their take care of their healthcare expenses only, or if you will be extending support for their lifestyle needs. Further aspects of their lifestyle to think about are things like groceries, pampering them by paying for their travels, or even getting them the latest appliances, which will make their lives (and yours, perhaps) easier.

As for your children, decide the milestones in their lives at which you will scale back on supporting them financially. Some parents believe that their children should fund their own tertiary education to foster a stronger sense of responsibility, while others are happy to grow a university fund to start them off without debt. Whichever you choose, preparing them to be less dependent on your own resources will be a win-win situation.

Shifting Priorities For Surprises (good and bad!)

Of course, life is often filled with unexpected events that may impact one’s financial plans. Found something you need to manage closely in your latest bloodwork? Or perhaps, an injury was recently sustained and requires rehabilitation? While unhappy surprises might seem like a setback, it’s a good opportunity for you to refine your savings strategy too.

This is where the art of shifting your priorities and being adaptable to your circumstances comes into play. You might find the need to temporarily draw from other funds if you don’t have a big enough one for your health, for example. Or you may choose to put more money into your investments when you have some excess funds on hand.

The Bottom Line?

Some may consider building a passive income through rental, investments, or taking up insurance solutions that offer a regular payout. In doing this, they can continue to sustain and support their typical daily expenses during rainy days. By proactively considering these factors, you can confidently embark on your retirement journey equipped with the strategies needed to thrive in a dynamic and uncertain future.