Beyond the Rs 1.5 lakh salary: Why relying on family in 2040 is a mathematical impossibility

Family has been considered the “safety net” of retirement planning in India for many years. That is to say parents have always thought they could rely on their children for some sort of financial help when they retire.

A very simple example is a couple who retire with limited or no money in savings, and rely on their son’s monthly income for support. As time goes by, he too begins to face EMIs, educational costs for his children, and increasing living expenses. He can still support them financially, but it becomes increasingly difficult. The children are still supporting them; however, their financial situation is deteriorating.

This may sound uncomfortable, even insensitive. But the intent here is not to question family bonds — it is to recognise that financial planning is about hoping for the best while preparing for every possible situation, so that support remains a choice, not a compulsion.

#1. Families Haven’t Become Weaker—They’ve Become Smaller

In many cases, earlier, when retired parents lived with their children as part of the same household, there was often at least three (or four) incomes which helped share the costs of living and other obligations.

But that safety net is gone for many modern, dual-income (one or two) urban families.

For example, in an Indian middle-class single-income household earning ₹1.2 lakh per month, paying a ₹40,000 home loan EMI, paying school fees (₹20,000), and covering monthly household expenses (₹20,000), the majority of monthly income will be used up for basic requirements.

Therefore, while it may be possible to add another ₹15,000 – ₹20,000 monthly for supporting aged parents, it could easily put a strain on the family’s cash-flow, and what was once seen as providing family support now becomes a source of financial stress, versus being a voluntary option.

#2. Medical Costs Don’t Ask for Permission

Medical bills are unpredictable, unavoidable and usually unannounced – that makes it hard for high earning families to cover these costs as well.

A medical procedure at a hospital in a metropolitan city may cost an individual anywhere between ₹3 lakh to ₹5 lakh. If you add to this the ongoing costs such as the cost of chronic medications which could be anything between ₹60,000 to ₹1 lakh/per year; the cost of hiring a caregiver for your parent which could range from ₹2 lakh to ₹3 lakh for the first year, the financial burden mounts very quickly on a child who is already paying EMIs and other household bills.

No matter how much the child wants to support their parent, providing long term medical support for a parent becomes a huge task for the child.

#3. Retirement Today Lasts Longer — and Costs More

Retirement is no longer simply a short phase of post-regular income of modest savings. Many retirees now have to make their money last 25 – 30 years as life expectancy has increased.

At the beginning of retirement an outlay of ₹40,000 per month does appear affordable today. However, because of inflation that same standard of living will likely cost approximately ₹65,000 in 10 years and over ₹1 lakh in 20 years.

When you expect family members to provide funding for decades of increasing costs in silence, it shifts their support into a long-term financial responsibility; one most households cannot realistically afford.

#4. Distance Has Replaced Daily Support

Although family relationships remain strong, geographical location is now changing how support is being provided. Many children are now located in distant cities or even in other countries due to work commitments and the very expensive nature of city living.

The geographic distance, however, also brings about many hidden expenses.

The expense of hiring a full-time caregiver can range from ₹20,000 to ₹30,000 each month. While home nursing visits as needed could cost anywhere from ₹2,000 to ₹3,000 per visit.

Even the cost of traveling (for flights, same-day airfares, extra leave for medical emergencies) can reach up to ₹50,000 to ₹100,000 annually. In addition, when support needs to be purchased or managed on an intermittent basis then additional costs will arise.

#5. Dependence Quietly Erodes Financial Independence and Dignity

At first financial dependence usually does not feel as if it is an issue, however, over time it will have changed your behaviour.

When you have to ask children to help fund your daily expenses, you may find that you are hesitant about making new spending decisions because of feelings of guilt.

As a result, small every day costs become important.

For example, a ₹5,000 medical test, ₹2,000 worth of medications, or a ₹10,000 vacation begins to need justification. What was previously independence, will gradually turn into caution.

Even when family members are willing to support you financially, in the long run dependency on others can subtly destroy self-confidence, your dignity, and your ability to make choices based on your own needs.

#6. Today’s Children Are Already Financially Stretched

In many cases an assumption of a child’s ability to use their parents’ money as well for support is based upon a reality of a child having to financially survive on their own. A high income does not equate to extra disposable income.

For example, a household with an income of ₹1.5 lakhs a month could have a monthly home loan repayment of ₹50,000. They also pay ₹25,000 for school fees and activities, and ₹20,000 for household costs. The total household expenditure would then include insurance and transportation, after tax and saving, there will be very little disposable income available for other uses.

In addition to using the little disposable income available for long term support of the parent(s), it can create a cycle of dependency where the financial burden is passed down from one generation to another.

#7. Support Should Be a Choice, Not a Financial Compulsion

The distinction lies in whether you are providing family assistance, or financing your family’s financial needs.

Support is most effective as an emergency response or to meet a specific need (not an ongoing obligation) when there is a means of supporting oneself through one’s own employment or retirement savings.

If there is no safety net, then monthly expenditures (₹15,000/month for basic living expenses; ₹30,000 for medical expenses) become obligatory. As such, with each passing year, the nature of family relationships will evolve, replacing affection with coercion, and support with obligation.