Avoid depending on children for post-retirement money needs

Avoid depending on children for post-retirement money needs

The wise amongst you would have already understood the importance of retirement saving. And more importantly, are saving for it. But many others still aren’t. Their excuse?

Far too Many.

“I am already running a tight ship with so lots of expenses these days. And I also need to save for my children’s future and my second house. That’s not all. I also struggle with the big home loan EMI I have. Who has any money left these days after all these expenditures are made? And to be honest, isn’t retirement too far in the future to worry about now? I am just unable to even think about it when I am fighting to earn enough to just survive today!” 

The casual approach that many people have about retirement saving is such that it seems as though either these people are certain they won’t live long enough after retirement or assume their children to be their retirement plan or fallback!

Let me share a real-life story.

Stretched finances

A friend of mine is the sole earning person of a six-member family (father, mother, his wife and four-year-old twin children). He once told me that he was under immense pressure to take care of family’s expenses and was just struggling to make ends meet. And at times, he really felt frustrated that his parents did not have any money saved up to support themselves even partially. Though he was thankful that they did everything to raise him, he also felt that if they had some money saved up, things would have been a bit easier for him. They are now fully dependent on him. My friend confessed that with parents’ rising medical expenses, which had become recurring monthly expenditure, he was now regularly running out of money much before month ends. I had absolutely no doubt that he was feeling helpless and finding it tough to manage things.

This is a real story and I am sure a very common one.

Your kids love you now when they are kids. But will they continue to love and be willing to take care of you financially (not just emotionally and physically) when you are old?

The answer is uncomfortable – and you know it even if you don’t want to accept it.


You shouldn’t be basing your savings decision on the notion that your sons and daughters will (happily!) take care of you in your non-earning decades (yes you will live that long).

Don’t get me wrong. Many kids are really great and will take care of their parents till tey breathe their last. But many others won’t. It’s a stark reality.

And let’s not judge them. Instead, let’s ask ‘why’ from a non-emotional perspective.

As harsh as this sounds, when you depend (demand money) on your children every month, you are in a way taking away money that could potentially be used for their own future savings. Remember, your kids will have their own life to live, spend money for and their own goals and retirement to save towards. And when compared to other kids whose parents did prepare for their retirement, your kids would be seriously disadvantaged in their own financial lives. And you would never want that for your kids. Would you?

Not saving for your retirement will make you a burden on them.

Don’t depend on empathy

And it is entirely possible that at least some of these ‘loving’ children may become less empathetic or compassionate towards their parents. There are thousands of over-filled old-age homes for a reason.

So just forget about the ‘I took care of them when they were young, and now they should do the same when I am old’ logic.

It’s true that you are spending on children’s proper upbringing, education etc. But if in doing so, you are compromising your retirement savings, then you got it all wrong.

Helping your children is your responsibility. But so is helping your own self for the future when you would not be earning.

The best gift you can give to your children is of letting them not worry about you. And it will also give you a feeling of pride and emotional independence when you don’t have to depend on them for money needs. The feeling can be liberating.

If you still haven’t given retirement any thought, then please do so. Here are a few steps to consider.

- Like everyone, you too have many goals. But keep retirement saving separate from all other goals. This ensures that you give retirement the importance it deserves and also do not dip into it for other goals. Remember that unlike other goals, you won’t get any loan for retirement.

- Your provident fund savings won’t be enough. You need to save more. And the earlier you begin, the lesser you will need to set aside every month. So begin saving for retirement early – even if it feels one or two decades too early (i.e., begin in yours 30s/40s).

- As your income increases, try to increase your monthly retirement saving as well every year or once in two years.

- Make sure you make equity a part of retirement savings, as it can give good inflation-beating returns in the long run. Use the equity funds route to creating your retirement portfolio (which also includes your EPF, NPS (national pension system) and PPF (public provident fund)).