An ideal retirement or a hefty inheritance: where should Aussie seniors’ savings go?
Many Aussies have had to tighten their belts lately, and seniors are no different - but the need to plan for a longer (and more expensive) retirement could be having a big impact on how older Aussies feel about leaving an inheritance for the next generation.
According to recent research released by the Australian Seniors Insurance Agency, among seniors who aren’t fully retired yet, nearly seven in ten admitted to sometimes being anxious over what retirement would hold for them, perhaps because more than one in three say they aren’t on track or haven’t achieved their “ideal retirement” yet.
A big part of this ideal retirement is having financial freedom during their retirement years, which ranked slightly below good health and just above staying mentally active in terms of importance.
Why aren’t Aussie seniors on track?
One reason retirement makes seniors anxious could be the looming obligation of leaving a hefty inheritance for their kids. According to the research, 85% of seniors were likely to leave an inheritance, and 65% felt they had a responsibility to provide for their children’s future.
When all is said and done, it’s estimated that Aussies have pledged about $3.3 trillion to their children, while a further $343 billion has been pledged to grandchildren.
That’s a decent chunk of change - and in order to save it up, around a third of seniors are holding off on retirement for as long as possible, and the same number are spending their retirement savings conservatively in order to build up a larger inheritance for their kids.
Despite this, the Australian Seniors Insurance Agency spokesperson, Simon Hovell said the attitude towards leaving an inheritance is “clearly shifting”.
“Whilst our research shows that the majority of seniors do intend to leave an inheritance for their children, significant percentages of those people we surveyed see their responsibility to do so diminishing compared to their parents’ generation,” he said.
Commenting on the shift in attitude, Rachel Lane, Principal of Aged Care Gurus said that “increasing longevity” and “the need to plan and pay for a longer, and possibly more exciting, retirement than their parents had” were factors that may contribute to Aussies feeling less obligated to leave an inheritance.
In fact, 88.9% of seniors said they wouldn’t feel guilty spending money that could go towards an inheritance for their kids, and around one in five felt it wasn’t important to leave an inheritance at all.
Deprioritising a hefty inheritance is one way for Aussies seniors to feel more secure about their savings carrying them through retirement - another way is to be sure that savings stash is in the best possible spot and earning a tip top return. Get started by checking out some hot savings account offers and term deposit offers for just about any term you want.