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.
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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.
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