Insurance a must for the 'sandwich generation' – The Straits Times

Putting your money to work

Apart from insurance, the “sandwich generation” must also focus on investing and saving.

To make your money work hard for you, have at least half of your assets in investments, says Ms Tan.

“Ensure that your investments are well-diversified to spread out the risks and ride out market volatility.”

Those new to investing can consider a regular savings plan, such as the DBS Invest Saver, that lets you invest a small sum regularly without having to actively monitor the market.

Robo-advisers, like DBS’ digiPortfolio, is another good way for investors to get started.

You should have at least 3 to 6 months’ worth of living expenses in an emergency fund — or more if you have dependants or work as a freelancer in the gig economy.

You can top up your parents’ Central Provident Fund accounts to help boost their retirement payouts. If you have spare cash, you can also consider doing the same for yourself and your spouse. 

For Ms Lim, looking out for deals that can help “save some bucks” can go a long way too.

“(My husband and I) also recognise the importance of budgeting for each of our kids as well as our own daily expenses,” she says. 

Funding your child’s education

Besides insurance, another product parents should consider is an education fund, primarily for saving towards your children’s varsity education. 

For a start, you should consider the number of years before your child enters university and the amount you will need to provide.

As a gauge, with the average cost of about $40,000 for an undergraduate education in Singapore and an annual inflation rate of 1.6 per cent, you’ll need to save about $55,000 over the next 20 years for a newborn child.

Endowment plans are a popular option for parents who prefer not to take too much risk. Most endowment plans require you to commit to paying premiums for a fixed number of years (typically 10) and let you choose the payout age.

Many plans also come with riders, which give assurance that your child’s education will be provided for in the unfortunate event of your death, disability or critical illness.

Kelly Ng is a finance correspondent from The Business Times