Retirement income adequacy trumps bequests to kids
Having a constant stream of regular income to cover essential needs has trumped leaving money to the kids, according to new research conducted by National Seniors Australia.
The research, published by annuities specialist company, Challenger, found that leaving money for the kids is no longer a top priority for older Australians with just 23 per cent of respondents rating it very important and only three per cent intending to preserve all their savings for an inheritance.
Challenger claimed these findings debunked the popular conception that leaving a financial legacy was a major concern for retirees.
“It’s time to put the inheritance myth to rest,” Challenger retirement income chair, Jeremy Cooper said. “Retirees have spoken and it’s clear that bequests are not the priority that many think they are. The need for regular income to avoid running out of money and, to pay for aged care and medical costs, is far more important for older Australians.”
“Bequests are not central to planning for their retirement and senior Australians are weighing these up against other trade-offs they must make to deal with longer lifespans,” National Seniors research director Professor John McCallum said.
“Having a constant stream of regular income to cover essential needs is the top priority for over 50s – 84 per cent rated it very important,” McCallum said.
Recommended for you
As the first quarter of 2024 comes to a close, Money Management looks back on the corporate regulator’s bans and AFSL cancellations in the financial advice sector.
Insignia Financial is holding ‘relatively steady’ onto its rank as Australia’s second-largest financial advice licensee after the Godfrey Pembroke exit but Count is hot on its heels.
Liberal senator Slade Brockman has said the government needs to have a “cold hard look” at the level of regulation in the financial advice space and the costs of running a business.
FAAA chief executive, Sarah Abood, has warned changes in the first tranche of the QAR legislation around advice fees documentation could create more work for advisers rather than less.