Research shows most retirees won’t give up lifestyle

ABC NEWS (Australia)

New research from AMP has found that while three quarters of Australians aged 65 and over believe it's important to pass wealth onto their children. But 7 out of 10 say they’re unwilling to compromise their retirement lifestyle to provide financial assistance. Ben Hillier from AMP research says retirees ultimately fear running out of money.

Transcript

00:00 Of course, they're uncertain about what the future holds, economic circumstances, their

00:06 need for aged care, just simply how long they're going to live.

00:09 And so, of course, they're going to be frugal and they're not willing to take an even bigger

00:14 risk in terms of helping their children.

00:17 They don't want to become a burden on their children if they run out of money.

00:20 The number one form of assistance is actually accommodation.

00:23 We're seeing children live in the family home for longer and longer periods and indeed are

00:27 returning back to the family home if circumstances require it.

00:31 And so, yeah, that's the number one thing.

00:33 Other top ways that parents are helping their children is through things like paying bills

00:37 for them.

00:38 And to some degree, they are willing to curtail their own spending, things like holidays or

00:42 lifestyle spending to be able to assist their children.

00:45 As a system, we're focused on the accumulation phase, building the pots of superannuation

00:50 as much as possible.

00:52 We haven't really given our retirees enough confidence in the tools and solutions to be

00:57 able to assist them to draw efficiently without the fear of running out.

01:02 We know very clearly from the research that retirees see their superannuation, for example,

01:06 as primarily designed to fund their own retirement.

01:09 And they don't generally have strong request motives for their superannuation.

01:13 But because of the fear of running out, they're actually underspending their superannuation

01:17 on average.

01:18 That's a big generalisation, I know.

01:20 Some people do certainly consume all their superannuation.

01:23 But on average, Australians draw the very bare minimum from their superannuation, which

01:27 means they're actually inadvertently leaving quite large requests.

01:30 Unfortunately, the vast majority of wealth transfer that happens is in the form of an

01:35 inheritance.

01:36 And that's going to the over 50s typically, those who are approaching retirement or even

01:40 in retirement themselves.

01:42 The inheritances aren't being received by the younger generation when it's most needed,

01:46 when they're raising young families, when they're trying to break into the housing market.

01:48 market.

01:51 [BLANK_AUDIO]

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