Sandwich Generation: How To Stop It From Happening to Your Kids

The “Sandwich Generation” — folks who have to juggle the needs of retired parents on one side and children on the other. Does this term describe you?

Why is the Sandwich Generation So Stressed?

Financial pressure from two generations

The cost of your parents’ healthcare and living expenses and your children’s school fees, tuition, and after-school activities can add up to astronomical amounts.

While the Department of Statistics has reported an increase in dual-income couples — from 47% in 2010 to 52% in 2020 — about two-thirds of parents still believe they do not have enough and they may outlive their savings.

Poor work-life balance

After a long day’s work, parents go home to start their other (unpaid) job — cooking for their family, getting their children to do their homework, making sure their parents take their medication, and countless other tasks that take a toll on their physical and mental health.

The sandwich generation may also discover they need to pause their own life goals in order to take care of others first.

How to Stop the Cycle from Repeating

Early financial literacy

Teach your children from an early age how to manage their own money, and when they are older, how to preserve and grow their wealth. Start small and simple. You can play a game at the grocery store where you set a budget for your kids to stick to.

Remember that children often emulate their parents so walk the talk and live within or below your means. Remind them that your family cannot spend on unnecessary luxuries and needs to save for a rainy day.

Look for a high-yield savings account for your children where you can put the money they get during holidays such as the Lunar New Year. Let them decide if they want to spend some of it on something they like, or save all of it.

Even when your children become adults, you still need to be their financial mentor. You could learn how to invest and tell them what you have learned over the years — the kind of stocks, funds, and insurance to buy, and whether it is the right time to buy a house, for example.

Share the financial responsibility

If you and your siblings have agreed to take care of your parents together, be transparent with them about your financial situation and don’t put expectations on one another. Keep an open mind and consider that your siblings may be facing financial hardships, so they cannot contribute as much as you can for a period. Situations also change over time — you may fall on hard times yourself at some point.

Self-care first

You can’t pour from an empty glass — make sure you take care of yourself first before you look after others. Talk to your spouse candidly and frequently about the issues you are facing, as well as your family’s finances. This includes any mortgages, income, and current and future expenses such as university fees. Make sure both of you agree that you do not want to burden your children with the task of taking care of both of you in your old age.

The first thing to do is to clear your debt, then save an emergency fund that can tide your family over in case anyone loses their job or ends up with a huge hospital bill.

Read more: Debt Settlement in Singapore: What Are Your Options?

Take care of your own retirement plan

Work with your spouse to bulletproof your own retirement plan. Relying on savings in your CPF account is not enough. Look at other investment products such as the Singapore Savings Bonds, index funds, and investment-linked insurance.

You can top up your own CPF to make sure you are setting aside enough for your retirement. And if you have more than enough right now, you can top up your loved ones’ CPF Special Account or Retirement Account to shore up their CPF savings too.

Another thing to consider is that as you age, you may face health complications. Make sure that you and your family are covered with the right insurance plans. Did you know that you can bump up your MediShield Life coverage? An Integrated Shield Plan has two components, the MediShield Life component run by the CPF Board, and private insurance coverage that give you additional benefits. Find out more about the best Integrated Shield plans here.

There are also insurance plans that help to grow your capital for the first 18 to 20 years of your child’s life. You can cash out when the policy matures and your children can start living their adult lives without having to worry if you and your spouse have enough money.

Do your estate planning now

It may sound grim, especially if you have just started a family, but estate planning — a.k.a. drawing up a will — is crucial in lifting the burden on your loved ones. Estate planning makes sure your assets go to those you choose to nominate if you pass away. It supports your family financially and alleviates the stress of them thinking about how to split your assets.

Get your parents to draw up their will and do their CPF nominations as well, so that you and your siblings will be at peace after your parents pass on.

Breaking free of the Sandwich Generation is not something that can happen overnight. But it can happen with dedication, educating yourself in financial planning, and spending prudently. For insurance-related queries, we’re more than happy to help and just an email away!

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