Dying is always too young no matter your age because there will always be some responsibilities and commitments; socially, emotionally or even financially, we hold on to. Whether we are at our 30s, 40s, 50s or even 80s, our lives are intertwined with many others.
The question is, if I were to die tonight, what will be my concerns? And the first few persons who comes to your mind are the ones most important to you.
Sounds Familiar?
“Who’s going to bring father to the heart specialist next week?”
“If father needs to have an operation, who’s going to pay for it and who’s going to help take care of him?”
“Who is going to bring our baby to the pediatrician for her injections?”
“My husband knows nuts about taking care of the family. I cannot imagine him juggling between work and our young kids. If only my mother can help.”
“Mum spent her whole life taking care of me and providing for me, even forgoing opportunities in life. Now I don’t even have to chance to take care of her.”
“I won’t even get to see my baby start his first day of school.”
“Will my kids be forced to start working before completing school?”
“We are already very conscious of our expenses to make ends meet; will my wife alone be able to handle the household expenses alone?
“Shit! My car loan installment, mortgage loan installment, personal loan installment, renovation loan repayments, balance transfer program I took up for our family Europe trip, my credit card bills!”
“My daughter loves playing the piano but the lessons are expensive. And I promised her a baby grand after grade 9!”
“My Company! Who’s going to run it? Will my wife be able to handle my other partners?”
“The personal loans that I took up from father and some friends when I started this company. I won’t be able to repay them this lifetime.”
“My assets and shares are worth more than 5 million now, but my children are too young to handle such amount of monies. I will want my wife to be in control of the money until they hit 30. But I didn’t think I will meet with an accident and didn’t have a will.”
And the list goes on… And this is all because of a promise we made to ourselves or others. The promise of taking responsibility over our own actions and not being a burden to those whose lives are intertwined with ours. I have no solutions to solve all this, especially the emotional part. The only possible way to exclude any relationship with anyone is to live alone on a deserted island.
Are You Ready?
One possible way of mitigation is to plan financially for unexpected death through different types of insurance.
Example 1:
If you want to provide for your parents at 30 years old when your parents are 60. They may need $60,000 a year for a good standard of living. If we do not take inflation into consideration, providing for 20 years will be $1,200,000. And we add 20% for old age heath expenses and travel plans, it will work out to $1,440,000.
Most importantly, prepare a will and a personal letter to let them know that you want to be the one to take care of them as they have taken care of you for the past 30 years. But because you left unexpectedly, you have provided $2,500 per month for each of them for the next 20 years and $240,000 as emergency funds for medical expenses and travel allowances as they have missed out on so much for you during their prime.
Example 2:
If you want to provide for your family especially when you contribute to 50% of household income, more have to be considered. If you are 40 with 2 young kids and assuming that you continue to work and provide for your family for the next 20 years. You may want to leave aside 70% of your nett salary in assumption that 30% is used for personal expenses and retirement planning. Drawing a $6,000 salary today will constitute to $4,200 per month catered for family expenses, totaling up to $1,008,000 for 20 years. And for this $1,008,000, we do not take your future pay raise, bonus and inflation into consideration. We may factor another 20% for increased expenses because of inconvenience when you are not around and 20% for education funds and other small variables. Total amount needed is $1,411,200.
And similarly, prepare your will and a letter to inform your family that you are no longer around to take care of them and the only thing you can do is to make sure they do not need to live a tougher life or miss out on any opportunities because of money.
Have You Even Thought About It?
Most of us live in the fallacy world where we will live forever and death never comes to our mind. Especially when we are so occupied with work, children, parents, love and fun, we may not even have the time to think of such situations. Remember, we don’t live once, we only die once. When? I won’t know. But always too early…
Are you ready to start planning for your family? Contact us to find out more
FG-info@income.com.sg
