Many retirees worry they will chew through all their savings and those fears could be chilling conversations about transferring wealth down to their children, a survey by AMP has found.
Young people are reluctant to bring up the topic of intergenerational wealth, with three in five failing to broach the subject with their parents and even fewer explicitly asking for financial help.
At the same time, the survey of 2000 people found half of young Australians believed they would need to support their parents in retirement.
AMP director of retirement Ben Hillier said the findings revealed an interesting dynamic within families.
“While many Australians under 40 are concerned about housing unaffordability and its impact on their long-term wealth and retirement, they are reluctant to ask for financial support from their parents, with many actually believing they will need to financially support their parents as they age,” he said.
Given many Australian retirees were fearful their savings would run out, Mr Hillier said it was “very possible these concerns are inadvertently conveyed to their children and hinder open dialogue on wealth matters”.
In what is often called the “great wealth transfer”, baby boomers are in the process of handing down an estimated $3.5 trillion in gifts and inheritance to their children by 2050.
Earlier surveying by AMP suggests Australians over 65 broadly believed their children were facing equal or tough financial conditions than they did at the same age but were simultaneously worried about their own financial security.
AMP Bank group Sean O’Malley said building up the financial confidence of retirees, and considering options like releasing home equity, would empower more Australians to support their kids.
“Under 40s are concerned housing unaffordability will impact their long-term wealth – a justifiable concern given home ownership is one of the key pillars for wealth in retirement for most Australians,” he said.
“While this needs to be tackled at a macro level by federal and state governments, there are other, more immediate options for younger Australians wishing to purchase their first property.”
The survey found 40 percent of under-40s believed home ownership was a main contributor to wealth in retirement.
Poppy Johnston
(Australian Associated Press)
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