Are we planning to retire and enjoy our remaining time, spending as we go, leaving nothing for our kids? Or are we going to curb spending, eke out our retirement savings and leave them an inheritance?
Older people should enjoy their retirement and not worry about leaving an inheritance, according to most respondents in the ANU Ageing and Money Poll. “Quite right” the SKI (Spending the Kids’ Inheritance) brigade say. Indeed, at Heydays we recognise that some of us will use retirement savings to (select those that apply): freshen up the house, get a new car, see more of the world, go to more shows, learn new languages / crafts / skills, pursue hobbies, keep fit, spend time with family and friends and find a way to give back to the community.
We are healthier and living longer, so there’s a whole range of activities that call us and will part us from our hard-earned cash: treks, cycle tours, cruises, cultural tours, beaches holidays, bush and city breaks, gadgets, clothing and of course a myriad of ways to enhance our wellbeing!
Speaking of health, as we age, some of that retirement nest egg may be directed towards health care, supplementing independent living with in-home support, or even paying for more constant medical care. The days of our children being just around the corner, able to pop in and see how the ‘oldies’ are getting on, are long gone. In this shrinking world, the kids could be anywhere! So we are more likely to need to fend for ourselves and one another in our dotage.
Evidently there are many ways that the potential inheritance pot, whatever its size, can and should be used… and that’s OK because most people in the ANU Ageing and Money Poll agreed that retirees should enjoy retirement rather than worry about leaving an inheritance, right?
Not so fast! In a seeming contradiction, in the same poll, three in four Australians aged under 65 think it is likely they will receive an inheritance through property or other significant assets. Something does not add up here: whilst the majority of those polled think retirees should enjoy themselves and not worry about leaving an inheritance, when it comes to individual expectations, we expect to get an inheritance. Our kids may well be among those who assume they will receive an inheritance.
As we approach retirement, planning how to manage our money through the next 25+ years will be a real challenge. Given that loved ones may be expecting to receive an inheritance, we need to gauge first up whether there is likely to be anything left in the coffers for them – after we have allowed for all of our other needs. And then we can have the inheritance conversation with them so they know what to expect.
At Heydays we’d love to hear: how are you managing the inheritance conversation? Do you have a plan to leave assets to your children? Has this even entered your thinking?
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