22/12/2022
YOUR CHILDREN ARE NOT YOUR RETIREMENT PLAN.
Your children are not your pension fund, but you should be your parents' retirement plan. Yes, I said so!
Your parents' boo-boos and unfavorable sociocultural and economic backgrounds should not create another unnecessary burden on your children in the future. You can be a nuisance and a drain to your children unknowingly. You have an opportunity to learn.
Learn to invest early, learn to have an emergency fund, and learn to create a retirement fund. You are way different and an incomparable generation.
As for you and me, we are in a generation called the “Sandwich” generation which is in between the parents and the children. But who is this sandwich generation and why is it struggling?...... If you’re financially responsible for your children and your retired parents, then all the way, you’re part and parcel of this group of people. Not only are you responsible for feeding, clothing, and sheltering your children, but you also have to assume the (increasingly excessive) cost of childcare, tuition, and the many extracurricular activities today’s kids take part in, not to mention the cost of taking the family for the odd meal out or vacation.
Supporting your own families is not the only financial challenge the sandwich generation should face, rather you are also responsible for supporting your aged parents in retirement.
The cost of raising children is increasingly becoming cumbersome but you still should take care of the elderly that depend on you while adequately planning for your retirement. You will need to live for about 30 years without working/earning or borrowing but just spending cash after retirement. Are you ready for that, are you a risk-taker who is moving into retirement blindfolded?
As for us, we cannot blame our parents for depending on us because of the times and the culture during which they were in the earning stages. They hardly had opportunities like we have today, and they hardly had access to financial education like we have today. Our parents lived from hand to mouth and probably survived to pay for our school fees and basic meals. Our parents have gone through various devastating cycles of inflation and economic meltdown and in most cases, their pensions were wiped out. We have to stop the cycle.!
How much do you really need to save or invest in order to retire independently? Well, let’s use the 25x rule. Do you think $500 USD per month can take care of you for 30 years? Well, let’s work it out. It means per year you need $6000 USD and USD$150,000 as a minimum for the remainder of your retirement.
If you want to be realistic you will know that you need a helper or two, you will visit the doctor more frequently, and you will also likely have to take care of atleast an orphan of your close relative especially given the advent of the pandemics and other diseases. You will probably need $500,000 in Africa to live a little comfortably over your retirement life.
How do I raise such an amount, that’s for another day? Keep following me.
Our parents never used to think of retirement planning because culture would indicate that the children would shoulder the burden, they were justified to work for tuition fees for their children. Today children are a little less responsible and can only consider their own children and spouse as core family.
Parents are increasingly appearing like a burden or a bother to their children’s good-looking spoiled spouses. A parent who raised five children will probably hardly have any children to take care of them, this is despite the wasted money on tuition fees. Parents may have postponed going for their holidays by alternatively paying for tuition fees, and today’s children scarcely give attention to such a sacrifice. It is key to note that cultural expectations were different back then, with parents assuming that their children would share the financial burden of taking care of them in their old age. In the past, most families lived hand-to-mouth, focusing on raising their children so they could be successful in the future and then contribute back to the family
On the other hand, our sandwich generation feels so responsible for parents although it’s highly unlikely for future generations to naturally have the same feeling. Parents will increasingly be viewed as extra burdens.
A word of advice: You need to reconsider if your income is almost wiped out by your children’s tuition fees. You will be making a mistake if that’s the case. You need to review that position and deal with peer pressure. You may be doing it for the sake of friends, peers and workmates, Indeed, the peer pressure of trying to fit within a particular class of your friends or workmates or neighborhood is real…it’s a demon of plunder!. Be yourself, and have a candid meeting with your family.
its unlike in the past…..My late father was one hero I will always remember, he had nine children, he never went to school because he was orphaned at 12 and he could not afford a chicken that was demanded as school fees. He is a hero because he took me through Universities, I was a bank manager at 28, he was a general hand all his working life, I drove a brand new car at 29 he never drove even a used car, I had bought some properties before I turned 40 but he never bought a single piece of land, I made a few mistakes though but I have the brains and opportunity to correct them. All my father could do was to raise the 9 of us and some grandchildren whose fathers were absent and other extended family members, at one point we were 23 in the same house. There was little awareness amongst the population of the need to do financial planning or investments, let alone retirement planning.
Right now the financial plagues that ravaged nations were as if they were targeting pensions though they did not leave pension funds closed, rather they left them with better balance sheets…. A story for another day.
I know I have started some fire when I said children are not a retirement plan and also when I said do not waste money on school fees because most of those decisions are peer pressures. Yes being able to walk away from expensive schools will cause pain on your children today but will relieve them of the future pain of taking care of you, it is ok to sometimes be selfish, this decision will give your kids greater freedom to pursue their dreams and raise their own families, while you enjoy financial independence.
Break the cycle, let it not happen to the next generation. Let’s talk of how you can accumulate the pension cash flows into the future.
