Money and Me: Supporting ageing parents - How much can you afford?

SPEAKER_1 (0:01)

Best of Live Well, featuring Lance Alexander.

It's not just about money, it's about you. Money And Me, where wealth meets self-awareness. Only on Money FM 89.3.

Lance Alexander (0:20)

Giving your parents a monthly allowance may be straightforward while you're earning a steady income. But what happens when they need more help financially as you continue with your own mortgage payments, raising your kids, and saving for your own retirement? An article in the New York Times looks at paying for elderly parents' expenses. It also raised a bigger question.

How do you make that support last? With me this morning is Elijah Lee, Senior Financial Services Manager at Phillip Securities. He joins me on Money And Me. Good morning, Elijah.

Elijah Lee (0:56)

Good morning, Lance.

Lance Alexander (0:57)

Hey, thanks for joining us this morning on Money FM 89.3. How do you work out what we can afford to give our parents without falling short ourselves? That's the big question.

Elijah Lee (1:09)

Yeah, I think that's actually probably the starting point of working out all the figures.

So maybe I'll share what I do personally, because I am supporting my parents, right? So what I know is basically, I mean, I lived with my parents for many years before I moved out. So I actually have a rough idea of how my household runs. So I guess that helps in knowing like roughly how much my mom and dad do spend every month based off their current lifestyle. And I guess I'm fortunate they don't really have a very luxurious lifestyle of any sort. Mom was a housewife for many years. Dad was a taxi driver until he retired. So we roughly know what it takes to keep the household afloat. But of course, naturally, inflation has crept in over the years since I moved out. And of course, things cost more now.

But roughly knowing how much they need, and then from there, looking at where does the money come from. Of course, some support comes from me. I give them cash every month, right? But I guess something I would like to bring up is that CPF is also a vital part of this conversation because mom and dad are getting payouts from CPF Life, which, you know, it does support a certain basic level of living for them. So once I worked out what they will get from CPF Life, and what myself, what I'm giving them in cash, my brother is giving them in cash, I have a brother, he's also working, so we all give CPF and give them all this support. We are, I would say, fortunate that it somewhat gives the expenses within a manageable amount. So basically, whatever comes in is enough for my parents. In fact, believe it or not, my mom being very frugal all her life, she still managed to save money out of everything.

SPEAKER_1 (2:44)

That is fantastic news.

Elijah Lee (2:46)

Yeah, it is. She's so frugal that even her CPF payouts are actually untouchy. So I'm living off my dad's CPF payouts and the money I give her and what my brother gives her. And CPF payouts have just been going into the bank account and just sitting there and slowly accumulating.

Lance Alexander (3:01)

That's wonderful news, Elijah.

Elijah Lee (3:03)

Yeah, that's wonderful. Yeah.

Lance Alexander (3:05)

So when you look at your parents, their recurring costs, living expenses, are you also bogged down by medical bills?

Elijah Lee (3:14)

Okay, so this is, I guess, something that's very case by case. Now in the case of my mom and my dad, okay, mom and dad have actually health insurance. They have a hospitalization plan. But of course, by the time I step into the industry, they start to have health issues. So although I really very much wanted to give them access to better medical care, we had to stick with the hospitalization plan that they have. And therefore, knowing what they have, we made sure that if, and there have been some hospitalizations over the years, but we just made sure that we went to the ward that was covered by the hospital plans. So in fact, sometimes my mom was also saying that, no, no, no, I don't need a B1 ward. She has a B1 plan.

We actually told her, she actually wanted to go to, you know, just kind of open ward. I think it's a C ward.

Yeah, correct. So she doesn't want to, you know, because like, because the higher the wards, generally they tend to be like, you know, a single bed and things like that. But yeah, she just wants to see people around. So yeah, she ends up in the C ward and all that. So our medical bills were actually quite well managed by their hospital plans. Both mom and dad have had hospitalization over the years. Mom had multiple surgeries in the past five years on her. She had a stroke once, she had a heart issue. And so all these costs, fortunately, because of the ward she chooses to stay in, which is well within her medical, her hospitalization plan, we were able to keep the cost under control. I think one important thing is, you got to know what you're eligible for, and don't just go to a private hospital and then cover that. Your hospital plan doesn't cover that.