As the breadwinner of a family, I noticed that when I planned for retirement. My biggest challenge is to determine how much buffer I need to factor in my retirement to fulfill my dependencies (aging parents) daily and special needs. As shared in my earlier post, money has always been a sensitive topic within my family. Thus, I needed a way to broach this topic in the least destructive way so that I could get the information I need to build my buffer. Else, I would never dare to retire.
This is what I did to get started which actually worked out quite well. Thought I should share it with you. Note that I haven’t completed all the steps. I am still finding a right moment to carry out actions 6-9.
1) Start A Conversation
Use an article to start a conversation with your parents on retirement. I found that this was useful as it makes the discussion less personal.
Check out The Straits Times “She’s Retiring Comfortably” by Linette Lai and “New Survey gives snapshot of typical retiree household” by Linette Lai and Janice Tai on 20th September 2014 . You can also find the articles here : http://ifonlysingaporeans.blogspot.sg/2014/09/household-incomes-up-with-bottom-20.html
2) Create Awareness of Retirement Planning
Use the article to ask them how much they think they need to retire as compared to the average retired household.
3) Create Mindfulness in Spending Habits
Get them to list down their current expenses and ask them how do they foresee their expenses will look like when they retire using the article’s average retired household expenditure as reference. If they have no clue how much they spend per month, share with them how you have been keeping track of your own expenses. Demonstrate to them how you have been actively weeding out the WANTS from the NEEDS and of course the savings and benefits. Do it in a light hearted manner. See here for illustration and the tools you can use. http://ladyyoucanbefree.com/2013/11/30/retirement-planning-project/
Ask them to join you in this exercise or maybe even start a competition where the family can review this on a monthly basis for the next 3-6 months. You may want to make this a yearly or quarterly affair after that. The purpose of this exercise is for you and your parents to be more mindful of their spending habits.
Set goals to improve the spending habits and compliment one another when a goal is met. You can even consider having a short celebration when a goal is met.
4) Generate Awareness of CPF Life
Share with them the CPF Life that the government has just introduced.
Highlight to them that everyone should at least achieve the minimum sum before they should even consider for retirement. Get them to share with you their views.
5) Generate Awareness of Medishield Life
Share with them the Medishield Life that the government has just introduced. Discuss with them whether they think it is of sufficient coverage. Get them to share with you their views.
6) Review their Assets (WARNING : this is a sensitive topic so do it gently)
Run through the assets they have. Ask them gently whether there are any assets that they believe are no longer relevant e.g. should they downgrade their property, are their stock portfolio still relevant etc.
7) Explore avenues where they could generate retirement income
Example rental, investment, doing part time jobs that they love to do like teaching, volunteering etc. Discuss intently whether their income could fulfill their retired expenditure. Review their assets again to explore whether these assets could actually help increase their retirement income. Now, ask them based on the numbers presented when do they believe is a realistic timeline for retirement.
Sometimes it may be helpful to show them your own retirement planning numbers so that they could appreciate the challenge you may have especially if you have a family or plan to have a family so that they can start taking more responsibility in their own retirement planning.
8) Set a Retirement Goal and Timeline with them.
Now that your parents and yourself have a very clear view of the income and expenditure needed for retirement and timeline. Share with them your bucket list and ask them whether they too have bucket list that they would like to fulfill in their lifetime. See here for illustration. http://ladyyoucanbefree.com/2014/05/31/bucket-list/. I feel and learnt that active aging is extremely important for the mental and healthy well-being of a retiree.
Set retirement goals. Work out the steps needed to reach these retirement goals. Review these steps quarterly or yearly with them. Celebrate when a short milestones have been reached.
9) Seek blessings from them to take responsibility in their own retirement.
What do you think? Any suggestions in fine-tuning these steps. I would like to hear from all the breadwinners out there.
Check out my Breadwinner Series :
Breadwinner Series : If I could turn back the clock…