Older working Australians expect to have a shortfall of funds in retirement but are planning to help their adult children financially, according to REST Industry Super.
REST’s annual white paper, ‘The Journey Begins’, found 72 per cent of older working Australians planned to help their adult children financially, primarily by drawing down from their super balances in retirement.
Reasons for this included organising to leave a significant inheritance (36 per cent), helping to pay school fees for their grandchildren (29 per cent), helping their children afford a holiday (27 per cent), and helping their children pay for a deposit on a house (21 per cent).
However, nearly a third of those aged over 50 have a retirement balance of less than $100,000, and only 55 per cent of older Australians expect to be able to afford a ‘modest’ retirement.
REST chief executive, Damian Hill, said the report showed that older working Australians were conscious of the need to plan for retirement but were still expecting to rely on the Age Pension, equity in their home, or Government payments to support their retirement.
“What comes through clearly is the desire of people approaching retirement to ease the financial burdens their adult children face today, especially with buying a house and covering school fees,” Hill said.
“That’s laudable but we would urge retirees not to forget that their retirement savings are first and foremost meant to fund their own retirement, and using retirement savings for other purposes may mean they become a financial burden on their own children later in life.”
