Challenges of Retirement Planning for a Single Parent
Retirement planning is increasingly becoming a hot topic among the affluent professionals and financially-savvy millennials. The issue has become more important than preparing a bucket list of things to do and places to visit. Usually, couples plan together to secure their financial future. However, the challenges are different and far greater for a single parent.
The issue is relevant these days because raising children is hard and financially draining.It’s doubly tough if you’re the lone breadwinner while simultaneously looking out for the welfare of your kids. Retirement planning or just thinking about it may be farthest from your mind.
But single parents need not feel hopeless because the challenges can be overcome. You deserve to enjoy a happy retirement as much as others with spouses or partners. All it takes is a firm resolve and determination to see things through.
The challenges of retirement planning for a single parent
The standard of living in Singapore is high which means a single parent would find difficult coping with the expenses. Parenthood, especially for single parents, is not limited to the financial aspect. You have to deal with the emotional, mental, and physical stress.
Everything compounds when the difficulty emanates from money matters. Hence, if you are a single parent, be prepared to take on the bull by the horns. The road to retirement is bumpy but getting to your destination is not impossible.
Expect the struggle to originate from the financial constraint. Single mothers might be at a disadvantage compared with single fathers. It is said that males have better chances of promotion than females. But that shouldn’t be used as an excuse.
An effective budgeting is absolutely necessary so you can work around your financial resources and make ends meet. Focus on providing the basic necessities like food, clothing, and shelter.Some single parents are more efficient than married couples or combined individuals who lack the budgeting skills.
Sometimes it’s not how much you earn but how you live within your means and still support your children. Having the discipline to stick to the budget is a good start when you’re planning for retirement.
One of the hardest temptations of a single parent is borrowing. Naturally, there would be times that your monthly income is not sufficient to meet the expenses. For as long as you are obtaining a loan for the right reason, then it’s justified.
But a single parent needs to distinguish a good debt from a bad debt. The best advice then would be to set up an emergency fund if possible and steer clear of debt as much as possible. Otherwise, building a mountain of debt would hinder your preparation for retirement.
In case you have existing loan obligations,work on accelerating payments if not paying them off soonest. Any saving or relief from interest cost will somehow lighten the financial burden. The steps might be difficult but breaking free from debt is better for a single parent.
Single parents should be conscious of their spending at all times. Tracking where every hard-earned dollar goes can help control spending.Try to limit your cash outlays on essentials.
Since providing for the household is your responsibility alone, don’t engage in emotional spending. It’s true that retail therapy unburdens the weary but it can disrupt your monthly budget. The last thing you need is to be financially dislocated by uncontrolled spending.
A single parent who is determined will instead save some or a little for retirement.It’s like planting the seed for your own retirement package.
Roadblock to a career change
If it appears that saving for retirement is not conceivable with your current monthly pay, then rethink your options. Maybe it’s time to search for other employment options or consider a career change.
This is a common but serious dilemma for a single parent. Even if you are qualified to move to a higher-paying job, it would entail more responsibility and longer work hours. On the positive side, a higher income would allow you to hire a nanny to take care of your kids.
Another option is to take on a second job with less pressure to augment your present salary. Any cash inflow should be welcome. But you should remember that there is always a corresponding sacrifice for every major decision.Because how else can you improve your financial standing if you don’t seize the moment.
If you have plenty of productive years ahead of you, expand your options.The ultimate beneficiary of any career change is your kid. Also, you’re not only working for your dependent but setting the stage for retirement.
In Singapore, housing is the third highest expense every family has to allocate in their monthly budget. Food and transportation expenses come ahead. Regretfully, single moms, in particular, are somewhat discriminated in Singapore.
Single mothers should either be divorced or widowed before they can qualify for the Housing and Development Board’s Assistance Scheme for Second-Timers.By law, only unmarried single mothers aged 35 years old and above can buy a Housing Board flat under the singles scheme.
This is the hardest among all challenges single parents encounter. Nothing is certain if the government will implement a new ruling to at least address the housing requirements of single parents.
Loy Yi Zhuo, founder of ChamberWealth, advises single parents to take note of their cash flow in their retirement planning. Loy says, cash flow is often of key significance for single parenthood, either due to premature departure or divorce.
“In the case of divorce, we will make sure our client policy beneficiaries and ownership is updated. This is to prevent any contestable rights from the ex-spouse in the event of claims or surrendering of policy for cash flow issues. In case of divorce and premature departure, we would advise using ChamberWealth AssetMicron to identify all existing policies and iron out all unnecessary duplicated policies to achieve optimum cash flow for the client.
“AssetMicron can also identify cash value that is available to the client, that they can use on a rainy day. This is to prevent our client from taking up unnecessary loans for emergency uses because they are unaware of their policies’ cash value .”
“Being a single parent is not easy, having to juggle your time between your children and your work. More often than not, your income and cash flow becomes an issue and we do our best to help these parents to reduce cost and free up cash for emergency use.”
Seek sound financial advice
Having the moral support of family members and relatives is good but not enough if single parents to ease the pressures of single parenthood. Many are consulting professional financial advisors or wealth managers to help them devise a retirement plan.
Retirement planning is a major component of personal finance and financial management. Regardless of marital status, everyone needs a financial safety net. If you desire a happy retirement like most Singaporeans, the best option is to seek sound financial advice.
There’s more to gain by knowing the ways to build wealth as a single parent. Keep in mind that your kids will grow up someday and live their own lives. After providing all their needs, you can enjoy the fruits of your labor because you prepared for your retirement too.