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Seniors more likely to spend savings than leave inheritance for their children, survey finds

Updated

October 05, 2017 20:46:42


Photo:

Travel, home improvements and budgeting for a long retirement mean more seniors plan to spend their savings. (ABC News: Jonathan Hair)

Conserving money to pass onto their children is no longer a high priority for today’s seniors, a new survey has found, with many opting to spend their cash on travel or future aged care needs.

Karen Rees, a research fellow at National Seniors Australia, said the organisation surveyed 5,770 of its members about their retirement income and plans.

The survey found that while a substantial proportion of seniors hoped to leave their children some money, their biggest priority was funding their own essential needs in retirement and making sure their money lasted.

“They want a regular, constant income throughout their retirement,” Dr Rees told ABC Radio Perth.

“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.

“One of the major comments to me was: ‘We don’t have a crystal ball.’

“It is an unknown and people are doing the best they can.”


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With life expectancy increasing, many seniors are concerned with making their savings last. (AAP)

Only 3 per cent of those surveyed planned to preserve all their savings for the next generation.

Ten per cent expected to have spent all of their savings in retirement, 41 per wanted to spend most of their savings, and 46 per cent intended to spend only some.

Parents helping out with house deposits

Dr Rees said there had also been a shift towards parents helping their children financially earlier on in life.

“One woman said to us, ‘I helped out on the deposit on the first home for both children so that they could get established in a home of their own. The children received a good education and were able to step into well-paying jobs. My current income does not cover the cost of running a home and so there will be nothing to leave the children’.”

Responses from the ABC Radio Perth audience revealed there a wide range of views on inheritances.

Deborah: “I’d sooner take more basic old age care than leave nothing for the kids. The kids and spouses disagree wildly and want me to spend it all on me — but really, I can’t.”

Helen Barry: “We’re in our late 60s. We didn’t get anything from our parents so why should we pass on anything to our kids?”

Karen: “The parents of both my husband and me were frugal in their own lives and left good inheritances for us. It behoves us to be good stewards and we do plan to ensure our children are beneficiaries.”

Trisha: “Our lovely daughters are happy for us to spend whatever we want and to enjoy our retirement. They will inherit the house. That’s about it.”

Jennifer: “When I was a kid, the parents didn’t need … aged care, and now they do. What are the kids actually expecting?”

Close-to-home spending

Modern-day Australians are also more likely to have expenses close to home later in life than previous generations.

Research by IPSOS has found that one in five 50 to 59-year-olds have children under 18 living at home, and one in 10 have children under 12 living at home.

Seventy-seven per cent of people aged 60 to 69 were renovating their homes, with one in four doing home improvement every three months.


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Many seniors want to enjoy their retirement and are less concerned with leaving capital to their children.

“I don’t think that [declining inheritances] necessarily comes out of selfishness, stinginess or leaving the kids out of the picture,” Dr Rees said.

“I do think people feel like they have done a really good job by their kids and they have now hit retirement and they should have some fun with it and make sure they can afford their care later on.”

Topics:

older-people,

family-and-children,

aged-care,

house-and-home,

family,

human-interest,

people,

perth-6000

First posted

October 05, 2017 08:00:00



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Article source: http://www.abc.net.au/news/2017-10-05/seniors-more-likely-to-use-savings-than-leave-inheritance-survey/9014800

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