- Date : 07/08/2018
- Read: 7 mins
Father's are always around to care for us throughout our lives. It’s only fair that we repay them by securing their retired life.
Age isn’t just a number when we talk about our elderly parents; it’s time for us to take up some responsibilities as their offspring. Here are people who have spent their entire life raising a family, spending the money they needed for their old age on your education – and in all probability doing it without any thought for their own financial security after retirement.
Now that they are in their golden years, are you going to stand by them? Well, you should.
With age comes vulnerability to illnesses, financial and physical challenges, and often a sense of a loss of dignity if (say) they do not own the house they live in, and are forced to be dependent on you or anyone else. But there is no need for them to feel insecure, or feel they are a burden on anyone, if only you take some steps. You could ensure health coverage for them; this would help manage their healthcare expenses adequately.
Similarly, finances will always remain an issue, but you can help them be secure in this respect as well. And then there’s the question of their accommodation; they may not express it, but having to live with you may be worrying them more than you realise. If they are in favour of it, why not find them an old age home where they can live with dignity among people their age who share their tastes and circumstances?
Let us consider each of the issues where you could help your aged parents be secure in their twilight years. Let’s start with health.
Health insurance
The importance of staying healthy during a person’s golden years cannot be stressed enough, making a senior citizen health insurance plan an absolute must, especially as a sudden medical emergency can result in a financial disaster. This is more so when living on a pension or interest income from savings.
The problem is, you may receive a rude jolt when buying health cover for your parents. The number of good plans for people above 60 in India is infinitesimal, and one has to do a lot of research to find one that fits the bill. Otherwise, your parents could find themselves with a raw deal, and have to grapple with unforeseen issues because of exclusions, sublimits and copayments at the time of making a claim.
(A copayment is a fixed amount for a covered service, paid by a patient to the insurance company before the patient receives service from a physician, while a sublimit is an addition to the limit that would otherwise apply to the loss – say, for expenses due to a cataract operation.)
Like most financial products in the market, it is advisable to compare different policies before settling for one. Please note that health insurance for senior citizens also comes with various features such as cashless hospitalisation, special coverage for ailments such as cardiac arrests, stroke, cancer etc. and critical illness cover, so look for benefits such as pre- and post-hospitalisation offers, no claim bonus, ambulance cover, and OPD reimbursements.
Related: Lesser known features of health plans that you should take advantage of
Also, try to gauge how hassle-free the settlement process is. You could look at copayment clauses, sublimits for cataract and other daycare surgeries), room rent eligibility (shared, non-AC private, AC private etc), and the premium payable annually. Remember, one buys health cover for making claims in future if needed, therefore it is imperative that one knows everything about the product before buying it.
Financial security
Like health plans, there is no standard one-size-fits-all investment option, and this applies to senior citizens as well; much depends on what your parents want. There are products like tax-free bonds which ensure a regular stream of income, but there are also fixed income avenues such as senior citizen savings scheme (SCSS) which you can consider. It is for you to decide whether the option meets your requirements or not.
In general, SCSS goes well with most people. As a savings and investment product for those above 60, the scheme is a godsend, boasting as it does one of the best interest rates for any government-sponsored investment product in India.
Related: What is the right age to start planning your retirement?
These are the salient features and benefits of SCSS:
- Easy availability: You just need to fill up a simple application form at your local bank or post office and you are set
- Minimum documentation: Document to prove age; which can be any of the following: passport, birth certificate, voter’s ID, senior citizen card, PAN, Aadhaar card
- Reliability: As mentioned earlier, this is a government-sponsored investment product and therefore comes with all the security and assurance associated with that label
- Multiple accounts facility: A single person can open multiple SCSS accounts, either individually or jointly with a spouse
- High returns: Returns are quite impressive at 8.6% annually
- Flexible tenure: The tenure is of five years but can be stretched by another three; this means your SCS scheme serves as either a medium- or a long-term investment plan
- Tax saver: TDS can be saved under Section 80C of the Income Tax Act, 1961, on income from the scheme
- Affordable investment: One investment, in multiples of Rs 1000 and not exceeding Rs 15 lakh, is allowed per SCSS account. This makes SCSS very affordable
- Early termination: In case of a sudden financial crisis, the account can be closed and the money accessed at a moment’s notice, making it a ready source of funds. However, this option applies only after the account has existed for at least a year. Also, a penalty of 1.5% of the fund will be deducted if it is closed after a year, and 1% if after two years.
If you want to take the capital market route, it is advisable to take the help of an authorised financial planner.
Related: Why you need to plan early to retire rich
Retirement homes
Sometimes parents are fiercely independent, even if they are not overly expressive about it. Discuss the issue of retirement homes – tactfully – and try to gauge if they will be happy to stay in one. This way, they may not feel they are a burden on you, and they will be among people of their age group with shared interests.
Actually, this may not be an altogether bad idea. Senior living is tough and one requires a trained external hand to age in a safe and secure manner, which you may not be able to provide. Retirement homes and retirement communities are a relatively new concept in India, but because of lifestyle changes, more and more people are becoming aware of their need, and your parents are likely to find good company.
Most retirement communities provide standard services such as a common kitchen that serves food for everyone, general housekeeping, and maintenance. Advanced retirement homes offer senior-friendly features such as personalised care, 24-hour medical assistance, and healthy activities that develop physical strength and improve cognitive abilities.
Related: Living in home versus living in a retirement home in India
On the flip side, very few retirement homes in India are known to provide assisted living facilities, including support for mundane activities such as bathing, eating etc. In fact, because of poor care provided by some of these homes over the years – especially lack of medical support and poor diet – many senior citizens are hesitant to choose a retirement home as their living options.
What is also worrying is that there are no regulatory government bodies to oversee this fledgling industry. So if you are considering this option, look at the services on offer, and get reviews from trusted sources. A bad choice can backfire. Worse than the money that will go down the drain will be the suffering your parents would have to endure.
Age isn’t just a number when we talk about our elderly parents; it’s time for us to take up some responsibilities as their offspring. Here are people who have spent their entire life raising a family, spending the money they needed for their old age on your education – and in all probability doing it without any thought for their own financial security after retirement.
Now that they are in their golden years, are you going to stand by them? Well, you should.
With age comes vulnerability to illnesses, financial and physical challenges, and often a sense of a loss of dignity if (say) they do not own the house they live in, and are forced to be dependent on you or anyone else. But there is no need for them to feel insecure, or feel they are a burden on anyone, if only you take some steps. You could ensure health coverage for them; this would help manage their healthcare expenses adequately.
Similarly, finances will always remain an issue, but you can help them be secure in this respect as well. And then there’s the question of their accommodation; they may not express it, but having to live with you may be worrying them more than you realise. If they are in favour of it, why not find them an old age home where they can live with dignity among people their age who share their tastes and circumstances?
Let us consider each of the issues where you could help your aged parents be secure in their twilight years. Let’s start with health.
Health insurance
The importance of staying healthy during a person’s golden years cannot be stressed enough, making a senior citizen health insurance plan an absolute must, especially as a sudden medical emergency can result in a financial disaster. This is more so when living on a pension or interest income from savings.
The problem is, you may receive a rude jolt when buying health cover for your parents. The number of good plans for people above 60 in India is infinitesimal, and one has to do a lot of research to find one that fits the bill. Otherwise, your parents could find themselves with a raw deal, and have to grapple with unforeseen issues because of exclusions, sublimits and copayments at the time of making a claim.
(A copayment is a fixed amount for a covered service, paid by a patient to the insurance company before the patient receives service from a physician, while a sublimit is an addition to the limit that would otherwise apply to the loss – say, for expenses due to a cataract operation.)
Like most financial products in the market, it is advisable to compare different policies before settling for one. Please note that health insurance for senior citizens also comes with various features such as cashless hospitalisation, special coverage for ailments such as cardiac arrests, stroke, cancer etc. and critical illness cover, so look for benefits such as pre- and post-hospitalisation offers, no claim bonus, ambulance cover, and OPD reimbursements.
Related: Lesser known features of health plans that you should take advantage of
Also, try to gauge how hassle-free the settlement process is. You could look at copayment clauses, sublimits for cataract and other daycare surgeries), room rent eligibility (shared, non-AC private, AC private etc), and the premium payable annually. Remember, one buys health cover for making claims in future if needed, therefore it is imperative that one knows everything about the product before buying it.
Financial security
Like health plans, there is no standard one-size-fits-all investment option, and this applies to senior citizens as well; much depends on what your parents want. There are products like tax-free bonds which ensure a regular stream of income, but there are also fixed income avenues such as senior citizen savings scheme (SCSS) which you can consider. It is for you to decide whether the option meets your requirements or not.
In general, SCSS goes well with most people. As a savings and investment product for those above 60, the scheme is a godsend, boasting as it does one of the best interest rates for any government-sponsored investment product in India.
Related: What is the right age to start planning your retirement?
These are the salient features and benefits of SCSS:
- Easy availability: You just need to fill up a simple application form at your local bank or post office and you are set
- Minimum documentation: Document to prove age; which can be any of the following: passport, birth certificate, voter’s ID, senior citizen card, PAN, Aadhaar card
- Reliability: As mentioned earlier, this is a government-sponsored investment product and therefore comes with all the security and assurance associated with that label
- Multiple accounts facility: A single person can open multiple SCSS accounts, either individually or jointly with a spouse
- High returns: Returns are quite impressive at 8.6% annually
- Flexible tenure: The tenure is of five years but can be stretched by another three; this means your SCS scheme serves as either a medium- or a long-term investment plan
- Tax saver: TDS can be saved under Section 80C of the Income Tax Act, 1961, on income from the scheme
- Affordable investment: One investment, in multiples of Rs 1000 and not exceeding Rs 15 lakh, is allowed per SCSS account. This makes SCSS very affordable
- Early termination: In case of a sudden financial crisis, the account can be closed and the money accessed at a moment’s notice, making it a ready source of funds. However, this option applies only after the account has existed for at least a year. Also, a penalty of 1.5% of the fund will be deducted if it is closed after a year, and 1% if after two years.
If you want to take the capital market route, it is advisable to take the help of an authorised financial planner.
Related: Why you need to plan early to retire rich
Retirement homes
Sometimes parents are fiercely independent, even if they are not overly expressive about it. Discuss the issue of retirement homes – tactfully – and try to gauge if they will be happy to stay in one. This way, they may not feel they are a burden on you, and they will be among people of their age group with shared interests.
Actually, this may not be an altogether bad idea. Senior living is tough and one requires a trained external hand to age in a safe and secure manner, which you may not be able to provide. Retirement homes and retirement communities are a relatively new concept in India, but because of lifestyle changes, more and more people are becoming aware of their need, and your parents are likely to find good company.
Most retirement communities provide standard services such as a common kitchen that serves food for everyone, general housekeeping, and maintenance. Advanced retirement homes offer senior-friendly features such as personalised care, 24-hour medical assistance, and healthy activities that develop physical strength and improve cognitive abilities.
Related: Living in home versus living in a retirement home in India
On the flip side, very few retirement homes in India are known to provide assisted living facilities, including support for mundane activities such as bathing, eating etc. In fact, because of poor care provided by some of these homes over the years – especially lack of medical support and poor diet – many senior citizens are hesitant to choose a retirement home as their living options.
What is also worrying is that there are no regulatory government bodies to oversee this fledgling industry. So if you are considering this option, look at the services on offer, and get reviews from trusted sources. A bad choice can backfire. Worse than the money that will go down the drain will be the suffering your parents would have to endure.
