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How to have children and a comfortable retirement? WARNING: This answer might be shocking for some.

Friday, November 7, 2014

I have brought up the topic of having children and what a pragmatic attitude towards having children should be before. 

In an expensive country like Singapore, I believe that having a healthy dose of pragmatism is even more important.

For young couples, it could seem like the most natural of things to spend money freely, giving the best they could to their children. 

However, it might be a good idea to hold back a little.

Now, before anyone protests, I am not suggesting depriving children of necessities. I am suggesting not depriving ourselves of a comfortable retirement! 

I shared a story in an earlier blog post before:

A reader discussed with his wife on whether some of the enrichment classes they sent their two children to were necessary. He knew they were spending a lot of money on such classes but he was surprised at how much they actually spent. So, apart from classes which were deemed essential, lifestyle classes such as tennis lessons were axed. This helped them save about $600 a month.
From: How to have a comfortable retirement?

$600 a month means $7,200 a year. Let us assume their children were to take classes for 6 years, it would amount to $43,200! 

Now, imagine if they were to do a CPF Minimum Sum Top Up (limited to $7,000 a year) to enjoy a 4% risk free rate and income tax relief at the same time. 

That would go some way to ensuring retirement funding adequacy. 

Want to upsize $100K to $225K? 

AK shows you how and with some music to boot: here.

Often, whether decisions are good or not will become clearer after some time. 

Hindsight is always perfect, isn't it? 

So, spending freely on children now might seem like the natural thing to do but, in our old age, we might just regret it.

In an article in MoneySmart recently, a Mdm Ang who is in her 60s complained about spending too much on her 3 children in the past. 

She and her husband didn't want their children to be saddled with huge study loans and paid for their tertiary education.

Mdm Ang complains that her children are so wasteful and take everything for granted now. 

"I should have used the money for my own retirement," Mdm Ang said. 

"My children don't even appreciate the sacrifices we made for them."

Oh, dear.

Another senior citizen, Mrs. Tan, 60, said that she and her husband spent almost $1,000 every month, sending their daughter to all types of classes, from ballet to abacus to piano. 

They don't even have a piano at home anymore.

Although thinking about children as consumption items might sound unfeeling, I believe that a dash of pragmatism is helpful. 

Like with all consumption items, we want to avoid over-consumption which inevitably will always set us back financially.

儿孙自有儿孙福, 莫为儿孙作马牛.

Related posts:
1. Married with kids? AK shares 5 steps.
2. What is our attitude towards having children?


B said...


I agree all parents want to give the best to their children but have to be wary of the cost or overtiring them.

For my own case, I prefer giving them lifestyle tuition like tennis or piani lessons than enrichment classes such as extra maths or science. I am in the same situation myself when I was a kid and those classes have immensely shaped my behaviour and attitude towards how I should approach life and others. There is just too much focus on the curriculum in Singapore in my opinion. But that is just my opinion.

pf said...

Diff ppl diff expectations.

I think equipping children with life skills is more impt than anything else. Allow children to fail. Teach them how to pick themselves up after setbacks. That's compared to enrichment classes.

I think its not that fantastic to send children to good schools. Too much pressure and might not even be a good egg (eg kong hee and Ming yi) after growing up. Whats the use of smartness with no integrity?

However, when i said such things, ppl wld comment that its because i don't hv children.

Sillyinvestor said...

Wa AK,

You seem to blog a lot about parenting.

I agree with B, I send my son for swimming and art enrichment lessons which he enjoyed. I teach him language and Maths on my own.

But, it is tough. The pressure is very real. I wrote about how many well-meaning friends, colleagues are telling me to send my son to Shishida, Kumon, and when older, learning lab. Even my MIL, will ask me to send my son to CL class since her other daughter is also sending her child there. Hello? I am a CL teacher...

The mentality fr many is:

I have given my best for my kids, if it doesn't work, they cannot blame me.

For me, I giam gana, I will send him to Kumon end of the year, as I find his nummeracy skills are progressing too slowly and I know primary Maths curriculum is crazy is SIngapore, but that is after stopping Swimming lesson.

It is tough, to be call a bad parent. I shameless. I do it my way. I just hope my son do not struggle with studies.

But then again, isn't "struggle" a great lesson to have?

Sillyinvestor said...

btw, I noticed some difference in your mood?

Hope all is well with you. If I just overly paranoid, just ignore me.

Take care, pat pat, at least you need not worry about money, cheers.

Anonymous said...

Hi AK,

Its very nice of you to bring up such mine fields that many of us prefer to sidestep altogether, by totally avoiding the topic.

I will only say that I agree with you.

*Now bracing for the backlash*


AK71 said...

Hi Mike,

I won't say that I am blogging about parenting, actually. I would say that I am blogging about being sensible when it comes to money matters as parents because we are also our own guardians. ;)

I guess it would depend on which angle we look at it from. ;p

Hey, thanks for looking out for me. I am OK. I have just been very busy lately with some personal matters. Appreciate the kind words. :)

AK71 said...

Hi Tree,

Yes, the easy way out is always to avoid talking about sensitive issues. Very Asian approach too. LOL. ;p

I have been called confrontational by many people before in my life but, believe it or not, I have mellowed quite a bit in my old age. ;)

Sillyinvestor said...

LoL, no prob, dun say I Kaypo can liao...

Hope it's you pa tor ing, watching late nite movie with potential LOL. ;p
Dun throw egg at me

AK71 said...

Hi Mike,

You have missed the mark by miles. Anyway, I am too old for late night movies. I would probably promptly fall asleep in my seat. -.-"

What I am doing now requires a lot of personal attention and physical work too. So, quite tiring in more ways than one. We can always chat privately in FB. Not comfortable with revealing too much here. :)

SMK said...

I am mildly apathetic at all these epiphanies on hindsight.

and mildly contented that people spread their money around. Sounds like another good decade to save and invest my money before a change in ideology again.

pf said...

Don't say children. We must be sensible about money with parents too.

When i first started working, my gross monthly pay was $1,300. After my uni, my first job gross monthly pay was $2k. I cld not rem which stage it was...but my mother wasn't happy with the $200 i was giving her. She said so and so's daughter was giving her mother $500. I told my mother to go and get so and so's daughter to be her daughter.

After several years of working, I did managed to increase the amount i gave my mother to $500. But there is no increment after that. Why? I don't see the need to because I contributed her medical fees when she needs it. I wld provide for my parents when they need it. If i were to give them a lot of my money, they would use it for purposes which i am not for. Won't go into details but i think some ppl wld get the drift.

Now i contribute $1k. Is it enough for my mother? No. She wants to keep all the money I give her for "emergencies". Unfortunately, if i give her the money she requests I able to decide what are the emergencies that qualify for the use of the money? I think not likely. So, my contribution wld most likely be capped at current level. No inflation adjustment.

Btw, i am also paying the basic bills of the household (utilities, telco, conservency charges, etc.)

So, my personal belief is that contribution to family need not increase as income increases and not in accordance to their demand.

AK71 said...

Hi pf,

Thank you so much for sharing with us. Good stuff. Should have been a guest blog, really. ;)

Yes, you are right. Parents can behave like overgrown kids sometimes. Wisdom does not necessarily come with age. -.-"

Your mom is fortunate to have a child like you who has a good head on her shoulders. :)

pf said...

Thanks....ur praises make my head big. Whahhaha....

Anyway, paisay lah. I wanted to write on this topic. But just kinda lazy.

AK71 said...

Hi pf,

Your head big, big and my neck long, long. Still waiting for your next guest blog. ;p

AK71 said...

From my FB wall.

On lease decay of 99 years leasehold HDB flats.

G should come up with clearer policy to address this issue. Majority of the people own hdb flats. If next next generation their flats become zero, where are they going to live? It's a big problem.

儿孙自有儿孙福, 莫为儿孙作马牛. :)

AK71 said...

Reader says...
On a serious note, really kids are very cute, u won't regret having them in your life.

AK says...
I only like to play with kids. I dun want to have kids of my own 🙂

Reader says...
If u hv kids on your own, u can play with them all day long. And engage 3 maids to do everything so Ur job is only to play, how wonderful 😁

AK says...
Wealth destruction!
No thank you 😜

AK71 said...

Jeremy Ko says...
Please get your son to buy his own flat. Or if he wishes, he can stay till he is 70, then buy another flat that has 30 years lease, by then, that should be cheap and affordable!

AK71 said...

AK71 said...

Reader says...
I watch my portfolio for next 2 yrs. If its consistent. I will retire. I worry abt kids expenditure in future. One more variable.

AK says...
Yes. Of cos. Children. Crossing fingers.

AK71 said...

Zq Ling said:

how many million approx you need for 3 kids and 3 grandkids?

AK said:

Alamak. Grandkids should be our kids' responsibility. If our grandkids are also financially dependent on us, then, unless we are very rich, we are in trouble. I will produce another video on the topic of having children without losing a comfortable retirement. Akan datang. :D

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