Financial Tips For The Sandwich Generation

01 Jun 2020 

Financial Tips For The Sandwich Generation     

With an aging population, more Singaporeans are supporting younger and older family members financially at the same time.  Taking care of children or elderly parents on their own can be trying at the best of times but having to do both at the same time can prove to be too much for some. Adults caught in this situation have been dubbed the “sandwich generation”, a group in their 30s, 40s or 50s who face the financial burdens of caring for their parents and raising their kids. 

Faced with their twin financial pressures, it’s easy for the sandwich generation to neglect their own retirement planning. This means that when they retire, the burden of caring for them might end up getting passed on to their children. And so the cycle continues.

If you belong to this group, here are some useful tips to help you stay on top of your finances.

Have a plan to pay for your parents’ care

There is a high chance that your parents might face more health issues as they age. As such, it is important that you ensure your parents are adequately covered in terms of healthcare finances. 

There are various healthcare financing schemes in place to ensure that Singaporeans have access to affordable healthcare. We are covered by MediShield Life for large hospitalisation bills and selected costly outpatient treatments. We can also tap on MediSave to defray the costs of these expenses, or to offset out-of-pocket payments for health insurance premiums, health screening and  vaccinations recommended under the National Adult Immunisation Schedule. Read “Did you know you can do this with your MediSave?” to find out more.

Monitor your parents’ health closely to get an idea of how much you may need to set aside for their medical needs down the road. Detecting illnesses and getting them treated early can also help to keep medical costs down so encourage them to go for regular health check-ups. 

Beyond medical expenses, you parents may also require long-term care. The Ministry of Health estimates that one in two healthy Singaporeans aged 65 could become severely disabled in their lifetime. 

For such long-term expenses, your parents can tap on ElderShield, a basic long-term care insurance scheme targeted at severe disability, especially during old age. This allows eligible members to receive a monthly cash payout for a period, depending on the plan your parents are on. The good thing is that premiums can be fully paid by MediSave! Other benefits and details about ElderShield can be found at the MOH website


Enhancement to ElderShield

CareShield Life is an enhancement of the current ElderShield scheme. It covers all Singaporeans born in 1980 or later, from age 30, regardless of their pre-existing medical conditions or disability. Singaporeans born in 1979 or earlier can join CareShield Life starting from end-2021, provided they are not already severely disabled. With CareShield Life, we can have better protection and assurance against the uncertainty of long-term care costs and reduce our families’ financial worries. 

Financial Tips For The Sandwich Generation

Set aside money for your children’s tertiary education

While you plan for your parents’ healthcare needs, you would also need to plan for your children’s educational pursuits.  The cost of funding a university education can be a challenge, especially if your child goes overseas to further their studies.  Starting a savings plan early will ensure they don’t have to compromise on their education. 

One popular way to save for a university education is to purchase an endowment policy, which pays out a lump sum typically after a period of 10 years. There are endowment plans designed specifically for children’s education, where the payout is spread out over the years that your kid will be attending university, rather than one lump sum at the end of the policy.

Clear high interest debt quickly 

Having too much debt can curtail your ability to meet your expenses, especially if they incur hefty interest rates.

The interest on unsecured loans can grow quickly if you do not repay the outstanding in full, making it even harder to keep a lid on what you owe. So it’s important that you work to clear your most expensive debt as quickly as you can. 

Financial Tips For The Sandwich Generation

Review your budget regularly

Whether it’s childcare, education or medical expenses, you will incur a lot more expenses compared to those who aren’t in the sandwich generation. For instance, hiring a maid to help look after your kids or parents can set you back as much as $1,000 a month.

So it’s essential that you regularly review your spending habits and look for ways to cut back where possible. Going online to compare prices of regular purchases such as diapers or infant formula is one easy way to find bargains. Another way to trim expenses is to reduce discretionary expenses such as eating out, subscribing to premium channels on cable TV, or sending your kids for enrichment classes.

Keeping your budget lean will leave you more funds to meet longer-term or unexpected expenses.

Financial Tips For The Sandwich Generation

Share the responsibility with your siblings

You don’t have to shoulder the burden of taking care of your parents all on your own. If you have siblings, work out an arrangement with them on how they can help to pay for certain expenses related to your parents. This will provide some welcome relief to your financial situation.

The responsibilities that come with caring for both children and elderly parents can take a toll on your finances. By following the tips above, however, you can avoid financial disaster and ensure that you are not only able to meet your daily expenses, but also have sufficient savings for your own retirement.

Information updated as at 18/3/2021.​​

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