How My Parents’ Generation retired Comfortably (and why their strategy still works today)
- Jan 4
- 6 min read
Updated: Jan 13
Watching my parents’ generation retire comfortably gave me a strong understanding on the formula to build a dream retirement life with modest resources.
My mom is comfortably retired. So are her friends. They travel multiple times a year, often beyond South East Asia. Some still work, but only to pass time, not to survive.
What’s interesting is this:
They come from diverse backgrounds. Some have never even earned more than $5,000/month throughout their working lives.
The thing they have in common?
Everyone is retired and live a fulfilling, jet-setting retirement with financial freedom.
So what's their secret?
A story from growing up
When I was growing up, life was simple.
In fact, our lifestyle was pretty thrifty till I developed an impression we weren't well to do. We certaintly had no fancy holidays or luxurious restaurant meals outside. In fact, I can count the number of countries I've been to prior to my university days with one hand.
At that time, it didn’t feel like deprivation. I had a good education. Tuition was paid for. University came without debt. What I didn’t have in lifestyle excess, I had in stability.
Only after I became a financial consultant did I learnt to join the dots backwards.
My parents delayed enjoyment not because they were stingy or didn't know how to enjoy. They simply understood the value of compounding and delayed gratification. In fact, my parents set a goal where they would set aside $100,000 each to travel around together when they are both retired!
Most of my mom's friends also started travelling extensively only when they retired. This was the time when they knew 2 things to be true:
1) Their responsibilities as parents were done
2) They have sufficient passive income set aside to take care of the rest of their lives
Having the clarity gave them the courage to live freely and truly enjoy themselves.
What they actually did
From my observation of my growing up years, along with my chats with my mom and her friends...
Here's the patterns I gathered:
They saved consistently and let compounding do the heavy lifting
Back in those days, fixed deposit rates are comparable to our bonds and investment returns today. This means by being frugal and saving as much as they can just in the fixed deposits was all it took to build decent wealth.
In 1984, the fixed deposit rates can go as high as 6.8% and this is just the board rate, not even the promotional rate. My mom lamented to me, "last time the FD rates were so high, just that we didn't have much money to invest!"
Back then, the minimum fixed deposit investment was just $1000. It's so much different from today where most promotional rates start at $10,000 - $20,000.
Money was much smaller then. Maybe that's why people exercised more patience, discipline and time. As a result, their small starting amount compounded to a size that could fund a jet-setting retirement lifestyle today.
They worked more than one job and/or did lots of overtime
Side hustles aren't new. In the past, it's common to take multiple jobs or if people are paid to OT, they do it willingly.
My mom used to work weekdays and weekends. If you’re busy working, you've no time to spend money. That alone created a surplus most people never build.
Nowadays, I noticed that those of us who struggle with a lesser income are also less willing to make sacrifices. There are times when I floated the idea of getting the right qualifications to pivot into a role with better opportunities to my clients and its met with resistance. "Huh.. need to study..."
When you don't earn a lot, you compensate by working harder. As a child, I watched my dad (probably in his late 40s or 50s) take night classes to improve his qualifications so that he stays relevant. There were so many times I watched him dose off while studying...
In my opinion, it's really a question of how much we want to succeed. Those who do simply take proactive steps to increase their incomes. The rest complain and do nothing.
They genuinely lived by “先苦后甜” (bitter first, sweet later)
Remember I could count the number of holidays I went to with one hand prior to uni? This is a lifestyle choice. In those days, it's common for my parents' generation to delay gratification.
I grew up thinking we were financially poor because I kept seeing my parents make frugal choices. Now looking back, I realised my parents simply chose to prioritze spending differently. It didn't occur to me how come they could give me 1 to 1 tuition when I needed it. It also didn't occur to me how come we had the means to afford private healthcare when I was hospitalised. (at that time, we did not have insurance)
From this reflection, I realised building wealth is about making wise choices. My growing up story reminds me of how Warren Buffett's children used to say they didn't realise their dad was so wealthy. That's because they lived modestly. As a middle class household, my parents prioritized education and healthcare. Luxuries like holidays and restaurant meals at 5 star hotels were rationed. My parents chose to enjoy life later, and the trade-off was a decision made consciously.
The real lesson (why it is applicable to you)
The world has changed. Interest rates aren’t what they used to be. Financial products are more complex. Lifestyle expectations are higher.
But the core principles haven’t changed.
Compounding is still the 8th wonder of the world
Only now, you don’t get it at risk free through bank deposits. You need to deliberately choose instruments that can at least replicate the rate of returns of the past, and commit to compound long term.
If my parents and their friends didn't stash their funds aside for years, the money would have been all spent and there won't be funds to compound, let alone fund their travels or comfortable lifestyles today.
Income matters just as much as savings
There are only two ways to retire:
Have enough assets to spend down for life, or
Have income that continues to cover expenses while you enjoy life.
Many retirees today still generate income, not because they have to, but because they planned for it. Today’s tools are far more advanced. What’s missing is not options, but action taking.
Nowadays, we earn a lot more than my parents' generation. This might mean we need not OT so much or take on more side hustles. Instead, we simply need to make sure we use our resources to build more income streams.
Read more on: the 4 levers that determine retirement readiness
Discipline is about being forward looking
People often say they want flexibility. What they really mean is optionality without commitment.
The uncomfortable truth is this:
Most people are bad at saving long term when money is fully accessible.
That’s why retirement planning is about strategy. A structured approach exists not to trap people, but to protect them from their future selves.
It may seem like our parents' generation did not need to sign up for a commitment. Yet the truth was, they imposed a mental commitment on themselves right from day 1. The fact that they had the option to spend what they saved but chose to delay gratification shows the kind of wisdom we should learn from.
The Takeaway I share with my clients
A good retirement is rarely built on high income alone.
It’s built on early clarity, consistent action, and delayed gratification.
Almost everyone I spoke to on the quality of retirement they envision, have told me they would like to minimally maintain their standard of living. If that's the case, the effort has to be intentional and not left to chance.
Not everyone who works hard retires well.
However, almost everyone who retires well planned early. (even if they earned modestly)
This intentional process is the Goals to Reality Approach (GTR Approach) I carry into every client conversation today.
If you want a clear roadmap using the GTR Approach to work towards your dream retirement lifestyle, feel free to reach me by dropping me a message.
Be sure to share the article if you feel this information is helpful. You will enable a lot more people to learn about retirement.
About Janice
I specialize in asset management and retirement planning.
Clients look for me primarily to outsource their retirement planning needs so that they can focus on other aspects of life that interests them. Many of whom are very good in earning their incomes in their respective professions and wish to ensure their monies continue to work harder while they focus on what they are good at. Refer to client testimonials here.
Disclaimer: The content created are based on my personal opinions and may not be representative to everyone or any organisation. If you have any doubts or queries pertaining to insurance or investment, please seek professional advice from a trusted adviser in an official setting. You may also reach out to me if you do not have a present adviser using the message box under 'Let's Talk'.