1 October 2014
Even secretly dream that he may be in a position to improve your old age and ‘pay you back’ for the sacrifices you made for him? Unfortunately a new ‘Life Surprises’ survey from Sanlam may just burst your bubble. More than 40% of South Africans over 50 are unexpectedly supporting a family member – with children and grandchildren being the largest supported groups, followed by extended family members and parents.
The study – which polled 600 South Africans aged 50 and up to assess how significantly life surprises had impacted their lives – found that more than half of black people and a third of white people are unexpectedly supporting a loved one. It also found that males were significantly less likely to support grandchildren (38.8% versus 47.9%) and parents (7.8% vs 16.4%) than their female counterparts but they are significantly more likely to support their spouse (21.4% vs. 3.6%). When asked what the one cost was that they never planned for but is currently part of their regular expenses, 18.9% of respondents cited family support and providing for children or grandchildren.
“These are worrying findings,” says Karin Muller, head of Growth Market Solutions at Sanlam, “especially in view of the fact that most South Africans are already struggling to support themselves through retirement. Many South Africans expect to support others – children, elderly parents etc – but the fact that these findings are for ‘unexpected’ instances of support, is also very concerning. To avoid this having a serious impact on our financial and emotional health, it is well worth South Africans including the possibility of supporting family members into their financial and life planning.”
Muller says that tackling this potential issue head-on is the advisable route to go. It starts, in her view, by having those conversations many people feel uncomfortable having. “Talking about money, and sharing personal details about finances, is not a conversation which happens easily in families. It may be especially uncomfortable to ask an elderly parent to reveal details about how prepared they are for their later years. But honesty is the best policy. Transparency will go along way towards helping all parties get as financially organised as early as possible.”
“With children, you need to assess whether they have undertaken any financial planning and whether they have any risk cover in place should they become unable to work through illness, disability or retrenchment.”
Muller said that after getting all the facts are out in the open it is advisable to talk to a financial planner, both about your financial situation should you have to support a loved one and about the financial situation of your family. “This can help you make provision in your own plans should it seem inevitable that you will ‘inherit’ the financial needs of others. And, if it is not too late, it can help your loved ones become more organised so that they can remain independent for longer.”
Clinical psychologist Nondu Mphambo says the emotional toll on family relationships is also a consideration. “Unexpectedly supporting a loved one can lead to bitterness and resentment on the part of the ‘supporter’ and humiliation and feelings of failure on the part of the ‘supported’. For instance, parents who were looking forward to the day when they were financially free to enjoy their later years and the fruits their labour may find themselves resenting their children or grandchildren should they remain dependents.”
She agrees with Muller’s view about being as open and transparent about financial situations as possible. “This can help mitigate the emotional impact, if handled with respect and sensitivity.”