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Inheritance & Retirement – The Australian Seniors Series

As Australian seniors get older, the reality of retirement becomes clearer, and many begin to make decisions regarding how and where they will spend their golden years. When thinking about retirement, the topic of inheritance inevitably comes up, with important questions around what will be left and to whom arising.

The Inheritance Insights report is the tenth instalment of The Australian Seniors Series, with this chapter examining the attitudes and opinions Australian seniors have towards inheritance and what their ideal retirement holds for them.

Inheritance & Retirement [infographic]

Shifting attitudes towards inheritance

As we get older and begin to consider retirement, so too do we begin to look at our inheritance plans and what we’d like to happen to our estate and assets once we’re gone. Incredibly, it’s estimated that about $3.3 trillion is being pledged to our children, while a further $343 billion is pledged to grandchildren. While the vast majority (85.0%) of seniors are likely to leave an inheritance for their children, only a fifth (20.9%) stated it is not important to do so, with close to a third of those who are not likely to leave an inheritance wanting to take care of themselves first (32.5%).

There is also an air of concern amongst those thinking of leaving an inheritance, with one-in-six (16.8%) seniors saying they are anxious they might leave their children and/or grandchildren without a substantial inheritance. This may be one of the main reasons nearly a third (30.3%) of employed seniors are holding off on retirement for as long as possible, with building a larger inheritance pool for their children in their sights. There is also the fear of family conflict, with close to one-in-five (17.8%) concerned that family members may argue over their estate upon passing, particularly over property (38.0%) and money (32.6%).

On the flip side, however, more than half (55.0%) of those surveyed feel that today’s younger generation have come to expect too much when it comes to receiving an inheritance from their parents or grandparents.

The ideal retirement

The idea of retirement can be a daunting prospect for many seniors, with 69.1 per cent of those not fully retired saying they are sometimes anxious about what retirement holds for them. This worry may stem from the fact that over a third of Aussie seniors (35.9%) feel they are not on track to achieve their ‘ideal’ retirement.

Good health comes out on top as the aspect most important in achieving the ‘ideal’ retirement, with seniors ranking it 9.8 out of 10. With such a strong desire for good health, it’s not much of a surprise that deteriorating physical health was the greatest retirement fear, with an average ranking score of 9.4 out of 10, followed closely by not having enough money to live on (6.6).

The cost of retirement living

With Australian seniors wanting to stay social and mentally alert, retirement villages could the perfect environment to provide both social interaction and new friendships. Two-in-five (39.9%) see these villages as an attractive living solution, with more than three-in-five (61.8%) of these seniors saying they provide an opportunity to interact with other retirees. However, for those who don’t find it an attractive option, over half (55.9%) said that this was because they are expensive, and 58.9 per cent said they would prefer to remain in the ‘family home’.

The family home can often change later in life too, with more than one-in-five (21.0%) seniors downsizing to a smaller property over the last five to ten years, while 23.3 per cent are planning to scale down in the next five to ten years.

For those seniors who have already downsized, more than half (55.1%) say that managing a smaller home is easier, while more than two-in-five (43.4%) say they did not need the space they previously had. Perhaps an indication of retirees searching for a sea or tree change, more than a third (34.4%) plan to or are currently living in regional or rural area.

As Australians get older, decisions around who will get their inheritance, and how much they’ll receive need to be made, along with how retirement will be spent. It’s a lot to take on at once so having conversations with family and early planning is perhaps one way to ease the pressure on what can be a very sensitive issue for many seniors.

Stay tuned for the next chapter of the Australian Seniors Series. A report for seniors, by Seniors


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Inheritance & Retirement Survey [pdf]