Retirees concerned about potential inheritance tax
The majority of Australian retirees (78%) are concerned about the Federal Government implementing an inheritance tax, according to the survey by equity retirement funding provider, Household Capital.
The survey, which was structured in collaboration with UNSW/Centre of Excellence for Population Aging Research, also found that 74% of retirees were concerned about being forced to sell their home to fund retirement.
More than 74% of retirees were concerned that the home would be included as part of an assets test and 73% said they were concerned, or very concerned, that they would be forced to use the Centrelink Home Equity Access Scheme.
Joshua Funder, chief executive of Household Capital, said that after two years of living with the threat of COVID-19, older Australians understood more than ever the value of the family home as a safe haven and the preferred place to live during retirement.
“It’s critical that we improve the awareness of the family home as the best place to live and the right way to help fund retirement,” Funder said.
“That means the value of home equity saved in the family home is now worth three-to-four times a household’s superannuation savings.
“We know government welfare alone cannot meet the retirement funding needs of the nation. Accessing private property in home equity must remain a voluntary, self-funded option available to retirees, not a tax and certainly not at the expense of existing entitlements.”
The study also indicated an urgent need for improved retirement incomes that irrespective of current income levels, 80% of older Australians stated their ideal retirement income would be $1,000 to $2,000 per month more than their current income and, for some, their retirement income was barely covering necessities, particularly for those reliant on the Age Pension.
Also, self-funded retirees found it more challenging to make ends meet given the persistent low interest rates and rising costs which were impacting across the socio-economic spectrum.
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