Supporting two generations

Feel free to reach out to PSG Wealth Adviser Bernice Barnard directly.

Don’t get me wrong, it’s a role that many of us accept with absolute love and a sense of duty, but the financial implications can be far-reaching if you’re not prepared. Balancing the needs of two generations, often while still working and saving for your own retirement can place immense strain on household finances. Many elderly parents today face circumstances that were never entirely within their control: inflation eating into fixed incomes, rising medical costs and retirement plans built in a very different economic environment. In many cases, one spouse managed the household finances, and after their passing, the surviving spouse is left facing unexpected expenses and reduced pension benefits, often without the financial literacy or awareness to navigate them.

But the challenges, while real, are not impossible to overcome. With some proactive steps and guidance, families can soften the financial burden, preserve dignity and maintain their long-term financial planning.

Take stock of the whole picture

Today’s elderly are living longer than ever before. While longevity is a gift, it can become a financial challenge, especially for those whose retirement savings are limited or whose expenses have increased unexpectedly due to inflation or health issues.

If possible, have an open conversation about finances, what your parents’ needs are, what can realistically be offered and what may need to change in the future. This shouldn’t be a businesslike conversation. Many elderly parents feel uncomfortable or even guilty about needing support. These feelings can complicate conversations about money, health problems, future needs or expectations, especially if the situation unfolds gradually, rather than suddenly. Remember, it’s about respect, preparation and shared responsibility.

Create an emergency buffer

Even small, consistent contributions into a dedicated emergency fund can make a meaningful difference, especially if it’s done in advance. This fund can be used to cover medical shortfalls, home care or unexpected costs that may arise with ageing parents. Starting an emergency fund builds flexibility and reduces the need to dip into your own long-term investments or take on debt during a crisis.

Speak to your financial adviser about the options at your disposal, based on what you can afford to save monthly.

Revisit their medical and healthcare planning

Healthcare is one of the most unpredictable costs, especially later in life. Reviewing your parents’ medical scheme option annually and supplementing with gap cover (if possible) can help limit out-of-pocket medical expenses. An adviser can help you to assess whether additional cover may be needed or whether existing plans could be structured more efficiently.

Where possible, it's also worth discussing living arrangements or home care preferences early. Planning for care before it becomes urgent can preserve both finances and emotional well-being.

Review income-generating investments

If your parents rely on income from investments or living annuities, ensure that these products are still appropriately structured. Are they drawing at a sustainable rate? Addressing this aspect early can make a significant difference later in life. Also consult a financial adviser to assess whether the underlying asset allocation is appropriate for your parents’ needs.

Downsizing or shared living arrangements

Downsizing or considering a shared living arrangement with a friend or extended family member with similar financial circumstances can be a practical way to reduce costs while maintaining independence. These arrangements can offer companionship, shared responsibilities and reduced living expenses. However, it is essential to formalise the agreement, clearly outlining how costs will be split, who is responsible for what, and how decisions will be made, to avoid misunderstandings and ensure fairness for those involved.

Check their eligibility for municipal discounts

Many pensioners unknowingly miss out on discounts and rebates simply because they didn’t know to ask. While these savings may seem modest individually, together (and over time) they can make a sizeable difference.

Enquire about municipal rebates. Most local municipalities offer pensioner discounts on property rates and other basic services. These are usually income-and age-based, and you may have to complete an application and provide supporting documents, but it can make a meaningful difference to their municipal bill.

Protect your own financial foundation

Maintaining your own financial health is vital, not only for your family’s future, but to prevent passing the same responsibility onto your children. This includes:

• Continuing your retirement contributions.
• Ensuring you are adequately insured against death, disability and severe illness.
• Avoiding the use of long-term investments for short-term needs where possible.

Supporting and caring for ageing parents is often a quiet, unspoken act of love. By focusing on what can be planned, however small, families can bring structure to uncertainty and reduce the future financial and emotional toll.