IF you are awaiting with epic calm the death of a rich elderly relative, then think again, because research shows that seniors are more likely to spend their money on themselves than leave behind a bumper inheritance for you to buy a Porsche.
Only three per cent of respondents in this year’s National Seniors’ social survey said they would leave all their savings for the next generation, and 10 per cent expect to spend all their cash on themselves.
The rest were split: 41 per cent wanted to spend most of their savings and 46 per cent intended to keep some and spend some.
Karen Rees, a research fellow at National Seniors Australia, said 5770 members were surveyed about their retirement plans.
“They know they might live longer and they are planning for that longer life financially, for their health and medical costs and also for lifestyle and travel,” she told ABC radio.
“…I don’t think that [declining inheritances] necessarily comes out of selfishness, stinginess or leaving the kids out of the picture.”
But there was a general sentiment among respondents that the next generation were already better off than current retirees and they felt no obligation to help them further.
“When discussing modern trends with my contemporaries, I find that we all feel that our children are no longer dependent on our estate, whereas in our turn, our parents’ estates helped us enormously,” said an 80-year-old female respondent.
The research also reveals that seniors are becoming more savvy about retirement income, tucking sums away to cover rising utility, aged care and medical expenses.
Basil La Brooy, from the National Seniors financial information desk, says this is bad news for children who are expecting a lump sum from mum and dad to help them buy their first home.
“Skyrocketing living costs and the need to provide for their own future care are forcing many older people to rethink the bequests they may once have left to their children,” he says.
“Most seniors are well aware how hard it is for younger people to get a foot on the housing ladder and would like to help.
“But these parents and grandparents also realise it could leave them short of funds later in life when they need them most.”
The NSA survey revealed that Australians are conservative in their retirement and want a regular ‘retirement pay cheque’ that is stable, rather than higher income with variability and risk.
“The use of financial advisors remains high and their ability to deal with changing retirement benefits and rules is critical, not just in finance matters but in care choices which are also complex and dependent on good financial advice,” stated the report.
“Of the respondents, about two-thirds owned their house outright and had in excess of $300,000 in savings.
“This is below estimates of what is required to support a comfortable life-style to age 90, but maybe not all people are planning for a ‘comfortable’ retirement lifestyle.
“People are not as worried of running out of money as they were five years ago, probably because of the high returns on Australian equities in recent years.
“This may indicate complacency and a reason for concern for the future in self-funding retirement. On the other hand, respondents this year were more ‘savvy’, most being aware of increasing longevity and making plans for it.”