LIVING with one’s parents used to be an option for many adults but for Malaysian millennials, it has become necessary because of low wages and high inflation.

In fact, Malaysia places fourth in the world when it comes to the number of parents who still have to support their children financially.

But the trend comes with a high cost, said a financial planner, as parents are digging deeper into their retirement savings to support their adult children.

The result, said financial planner Robert Foo, is that parents of millennials will not be able to enjoy a comfortable golden age compared with the previous generation.    

This something that both Nur Alisa and her mother, Norhayati Seman, are experiencing.

The 30-year-old freelance writer barely scrapes by with the RM2,000 she earns a month.

Nur Alisa lives with her parents and they help her out when they can. This even while they no longer work and depend on the RM2,000 Nur Alisa’s father receives from the Social Security Organisation (Socso).

“As mothers, we feel sad when we see that our children don’t eat enough,” said Norhayati, who pays for the family’s electricity and water bills.

She helps her daughter occasionally but realises it can be annoying, as she sometimes does not have enough for herself.

On her part, Nur Alisa tries as much as possible not to burden her mother.

“When I travel, I would either take public transport or borrow my mother’s car. And I will pay for toll and petrol,” she said.

“Prices go up so suddenly, especially for those who live in the city just like myself. Besides petrol, food and toll, I also pay for PTPTN (National Higher Education Fund Corporation loan).”

Norhayati said it is okay to help her daughter once in a while but she can’t afford “to do it all the time”.

The power of protection   

An HSBC survey found that half of the parents in Malaysia still support their children financially into adulthood.

The findings put Malaysia in fourth position globally of parents who are financially supporting their children into adulthood. The study in Malaysia was conducted among 1,000 youths aged 25 between March and May last year.

The report, The power of protection: facing the future, found that 57% of parents in Malaysia with children older than 18 are supporting them mostly in education (69% of parents), with daily living costs (41%), medical and dental care (38%), rent or accommodation costs (27%) and holidays (29%).

Other youth interviewed by The Malaysian Insight said their parents help out on accommodation, meals and emergency money.

Shahril Mohd said he is incapable of paying all his expenses with just the RM1,200 he makes as an assistant mechanic.

His 59-year-old mother, who draws a RM2,500 pension as a former nurse, does not complain but sympathises with him.

“Low salary makes us think twice and thrice before renting a place. I travel to work on my old motorcycle now. Sometimes the motorcycle breaks down, my father gives me money to repair it.

“Sometimes our parents feel sorry for us because they don’t want to see us suffer,” said the 25-year-old.

He hates it when people say his generation complain too much and are pampered.  

“(We are) not spoiled, (we) really can’t afford things. It was difficult as well back then, but prices were not as high as today.

“Ten years ago, the salary for shoe promoters at supermarkets was RM800.

“Now, the basic (salary) is still RM800 but the prices of goods have increased. Therefore, it cannot be compared with the past,” said the youngest of four children.

No more golden age      

The same HSBC report said the practice meant that parents were spending an average 33% of their disposal income on their adult children and having less to spend on themselves to prepare for retirement.

HSBC found that 67% of parents would prioritise their child’s tertiary education over their own retirement, while 30% withdrew from their savings to support an adult child, and 17% incurred more debt.

Foo agreed with Shahril’s observation about current incomes not matching the cost of living, adding that the situation was different 15 to 20 years ago.

“If you look at what we paid for 20 years ago, compared with what they have to pay for now, it’s difficult to be independent, and live separately from their parents,” he told The Malaysian Insight.

The hardship will be felt both ways for low- and middle-income families, Foo said.

Just as parents are helping struggling millennials, they are setting themselves up for a gloomy future as their savings get spent on their kids.

“Parents today will not be able to enjoy their golden age unlike parents of the previous generation.” – January 3, 2018.