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Do Parents have obligations to ensure kids have comfortable life?

Updated: Oct 6, 2021

This week, we have a very interesting and controversial topic discussed by two fathers, James and Zong Jie – Are parents obliged to ensure their kids lead a comfortable life?


Some may argue that it is the parents’ responsibility since they choose to have kids, while others may say parents are obliged at least until the child step foot in the working world. The word ‘comfortable’ is subjective. According to James, comfort should be within your own means. If you’re earning more than $10,000 a month, you may have the privileges to spend more. However, this may backfire on them. A comfortable life may jeopardize their independence and financial welfare. The crux is to empower your kids to solve their own issues. It is also important to teach them the importance of savings at a young age for them to cultivate good money habits.


James uses the bottom Maslow’s Hierarchy of Needs as a guideline for the minimum provision parents should give, that includes food, clothing, housing, education etc. Afterall parents are adults with more knowledge, emotional and financial capabilities.


As a father of two, Zong Jie now puts himself into the shoes of his father. He admits he fall into the category of spending 2.5 times of his monthly income on his children than to set aside for his own nest egg. He is not alone. A survey conducted by AIA found that 60% of Singaporeans face uncertainty in the future by not making retirement planning a priority. Understanding the importance of a good education and what it is like to lead a stable or even better life than theirs, parents set out with good intentions to fund their children’s life. Sometimes, unknowingly at the expense of their golden years. No doubt, every parent would want the best for their children.


Then comes the question, whether should parents prioritize their retirement or children’s education first? It is not all or nothing. Rather, finding the middle ground or prioritizing what fits the current situation on hand.


Putting yourself first is not selfish or downright bad parents. Let’s use the analogy of the safety briefing in an aircraft. There is a reason why the air stewardess requires you to put on your own oxygen mask first before helping your child. This goes the same for retirement funds. Set aside money for your retirement nest first before focusing on your child’s savings plan. Once you are financially stable, you would be able to better help your kid when the need arises. The essential takeaway is to focus on yourself first.


The landscape of retirement planning has changed. James recalled that during his grandparents’ generation, it is about setting aside assets for the next generation. Today’s Gen Y, better known as Millennials, it is not passing down any burdens or debts to the next generation.


It is understandable that parents’ have this sense of duty to want to do everything to ensure that their child succeed or lead a comfortable life. But parents also need to trust that their kids would have the resilience to tie through adversities in life. The income earned in today’s world is higher than our parents’ time. It is a fact that education fees and housing prices soared tremendously over the years, bearing in mind that it will continue to rise in years to come. Government bodies are drafting and revising policies, subsidies, loans, and grants to support most life decision. Housing grants, baby bonus, working mother’s child relief to list a few. However, there are not a lot of options in the retirement scheme. Reality is, we each have our own set of financial needs to face.


That is not to say as a family you should not be going or enjoying holiday trips. Do it with proper financial planning and goals. Covid-19 has saved us a lot on travel expenses but divert this ‘savings’ on staycations and attractions within the nation. If you have not make full use of your Singapore Rediscovery Vouchers, here’s a shoutout to visit the River Safari for the adorable cub before the year ends.


Holistic planning requires planning to be taken from the broader perspective. Zong Jie suggest using 10-15% of your income for an income protection insurance. This protection can offset you 5-10 years of your annual income. As a rough gauge, 30% of your income should go into protection and personal savings. The figure can be tweaked accordingly. Will and Lasting Power of Attorney (LPA) is another segment to consider. Plans change according to situations and environment. One can never be too early to start.


Think about it, when you are adequately covered in retirement and protection planning, in time to come it put less pressure and burden on your kids to shoulder the responsibility if something happen.


Disclaimer: The information is meant purely for informational purposes and should not be relied upon as financial advice.









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