Mawlana Hazar Imam addressed this in an interview with Quartz during his Diamond Jubilee in 2017, stating that “financial institutions ought to be a great deal more open to social support.” A longer lifespan means that people must save more for retirement. It is important for the elderly to save early on in life, so they do not face the burden of financially dependency on others. However, even if they were unable to save an adequate amount when younger, there are still options available in older age.
Many elderly couples in Pakistan opt to live with their children, and while familial ties are important for cultural reasons, they are also essential for economic survival. Living with one’s parents after marriage is rare in the Western world, but is the norm in Pakistan. Traditional society places a great deal of importance on cultivating familial ties from a young age, and so that transition from childhood to adulthood, under the watchful eye of one’s parents, can feel organic and natural. Giving an elderly couple the opportunity to assume the role of grandparents, in addition to parents, can allow them a larger role in the next generation’s lives. Grandparents can teach things that parents cannot, and looking after children can sometimes represent a caring activity in retirement.
South Asian parents are known for investing significant amounts of their income and wealth in their children’s well-being. As a result, they often fail to prioritise their own needs and rarely save adequately for their own retirement. However, with the economic instability experienced worldwide in the past decade, it can be difficult for the workforce to simultaneously provide for their parents and their children. The majority of households in Pakistan today are still supported by a sole breadwinner, which can restrict a household budget even more. In order to prepare for a situation like this, it is important for people to make the necessary arrangements to ensure that they are taken care of in their old age.
A good time to start saving for the future is early in one’s career, i.e. from the first year of paid employment onwards, and increase savings in proportion to one’s income over time. Those who are past that point in their lives should start saving as soon as is reasonably possible. The best way to save is by planning out finances in advance. One might begin by dividing expenses into three categories: essential monthly expenses, non-essential monthly expenses, and essential yearly expenses, i.e. property taxes, insurance, etc. Next, senior citizens should compare this amount to the pension they receive annually. If their expenses are almost as high, equal to, or greater than their income, they should adjust their budget accordingly by cutting down on non-essentials.
Furthermore, seniors should open a savings account with a bank, as opposed to accumulating savings in cash. Many banks in Pakistan offer incentives to seniors to open savings accounts with them. For example, various banks offer a savings account to pensioners without the requirement of an initial deposit, and an interest pay-out on a biannual basis. On the other hand, banks also offer no restrictions on withdrawals and a preferential rate of interest. Senior citizens should look into the options available to them and choose the one which best suits their needs. The Aga Khan Economic Planning Board for Pakistan recently organised a workshop entitled “Home Budgeting and Financial Planning.” Programmes like these teach senior citizens, as well as other members of an extended family, how to make financially smart decisions, which can help them save more for the future.
Quality of life should never be overlooked and, as a community, we have a responsibility to ensure that our elders are well taken care of. We must work in collaboration with them to make sure that they take the necessary steps to build a strong financial future. Jim Rohn, an American motivational speaker, once famously said, “One person caring about another represents life’s greatest value.” Together, we can work to ensure that our elders have everything they need. After all, many of us owe our current stability in life to them.