Re­tirees sad­dled with kids’ costs

China Daily (Hong Kong) - - NATION / HK - By GAO CHANGXIN in Shang­hai gaochangxin@chi­

If you’re re­tir­ing in China, you can pretty much for­get about the va­ca­tion house in Mi­ami Beach, the trips to Europe and the 18-hole golf cour­ses.

While some of your more for­tu­nate coun­ter­parts in the West might en­joy such lux­u­ries, chances are that when you re­tire here, you will still have to sup­port your kids.

Li Quan, 57, a Shang­hai res­i­dent, said he never dreamed of own­ing a beach house. He re­tired three years ago, and has been help­ing pay his son’s mort­gage while hold­ing weekly fam­ily din­ners with his re­tired wife.

Work­ing at a US com­pany, the 32-year-old son is by no means a slacker. In fact, the ju­nior Li is among the more suc­cess­ful of his age group, mak­ing $ 1,000-$ 1,500 a month, de­pend­ing on perks, and look­ing at a bright fu­ture up the cor­po­rate lad­der.

It’s just that, as a new hus­band, he is find­ing him­self be­hind on bills and stretch­ing to pro­vide for his fam­ily in a city where home prices are more than 28 times the me­dian an­nual house­hold in­come.

“There is no shame in it. It’s the re­al­ity here,” said the elder Li. “It’s your son, so you’ve got to do what you’ve got to do.”

Li is far from alone in China, as HSBC Life Insurance Co found out. In a sur­vey pub­lished on Tues­day, the in­surer said that more than four in five — 76 per­cent — of wage-earn­ers in the Chi­nese main­land ex­pect to sig­nif­i­cantly fund fam­ily mem­bers af­ter re­tire­ment.

Among those al­ready re­tired, more than seven in 10 — 71 per­cent — are bur­dened with fam­ily fi­nan­cial re­spon­si­bil­i­ties, beat­ing the global av­er­age of 45 per­cent.

The sur­vey polled more than 16,000 peo­ple in 15 mar­kets, with more than 1,000 re­spon­dents from the Chi­nese main­land.

About 59 per­cent of peo­ple who are still work­ing ex­pect to sup­port their chil­dren fi­nan­cially dur­ing re­tire­ment. Another 10 per­cent ex­pect to sup­port both their chil­dren and their grand­chil­dren. And about 32 per­cent say they ex­pect to sup­port both their grand­chil­dren and their par­ents.

Of those al­ready re­tired, 40 per­cent are sup­port­ing their chil­dren, 28 per­cent their par­ents and 9 per­cent their grand­chil­dren, the sur­vey found.

“To­day’s de­mand­ing work en­vi­ron­ment drives the as­pi­ra­tion for a com­fort­able and re­lax­ing re­tire­ment,” said Jim Costello, HSBC Life’s ap­pointed CEO des­ig­nate.

“Fund­ing of de­pen­dents in re­tire­ment is com­mon within the Chi­nese main­land, and this fac­tor will con­tinue to be a ma­jor con­sid­er­a­tion in re­tire­ment plan­ning,” Costello said.

He added that the gap be­tween re­tire­ment ex­pec­ta­tions and re­al­ity has re­sulted in re­tirees’ sac­ri­fic­ing their per­sonal de­sires.

Chi­nese par­ents are more will­ing to make that sac­ri­fice than their Western coun­ter­parts, said Yu Hai, a pro­fes­sor of the so­ci­ol­ogy depart­ment at Fu­dan Univer­sity in Shang­hai.

The well-be­ing of chil­dren is cul­tur­ally em­bed­ded in the minds of Chi­nese par­ents, he said.

“In fact, to­day in China, the com­mon thing is for par­ents to chip in for a child’s home. Not chip­ping in is un­com­mon.”

That’s if the par­ents have the fi­nan­cial means to con­trib­ute. If they don’t, they are more will­ing to open their doors to the younger gen­er­a­tion, and the chil­dren move in for the eco­nomic ad­van­tage.

To­day’s dif­fi­cult eco­nomic re­al­ity, com­bined with par­ents’ will­ing­ness to pro­vide, has cre­ated a grow­ing group of “mama’s boys” who turn to their par­ents for sup­port, Yu said.

A 2011 sur­vey by Shang­hai’s fam­ily plan­ning au­thor­i­ties found that about 30 per­cent of young mar­ried cou­ples live with their el­ders.

Wage in­creases in China since the coun­try’s open­ing-up in the 1980s hardly meet the growth of home prices. And a leaky so­cial se­cu­rity net re­quires peo­ple to save ex­tra money be­yond what is needed for a house.

All this com­bines to make an ar­du­ous life for young peo­ple who are try­ing to start fam­i­lies of their own.

In Hong Kong, where home prices and pop­u­la­tion den­sity are among the world’s high­est, more than 90 per­cent of new grad­u­ates live with their par­ents, ac­cord­ing to lo­cal me­dia re­ports. All in all, in many cases, not much money is left for fun af­ter re­tire­ment.

In re­sponse, more re­tirees th­ese days are seek­ing con­tin­ued in­come through another job, rather than re­lax­ation. And the gov­ern­ment may help.

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