- 80% of Australians over 65 believe their children face harder financial times.
- 70% are unwilling to compromise their retirement lifestyle to help financially.
- Home equity release seen as a potential solution, despite associated challenges.
A recent survey by AMP reveals that 80% of Australians over 65 acknowledge their children’s financial difficulties compared to their own at the same age. Despite this awareness, 70% are reluctant to compromise their retirement lifestyle to provide financial assistance.
Solutions such as reverse mortgages and home equity release are being considered, allowing retirees to aid their children without moving out of their homes.
Survey Finds Boomers Reluctant to Jeopardize Retirement for Financial Aid to Children
Recent research by AMP indicates a significant disconnect between older Australians’ empathy for their children’s financial struggles and their willingness to provide monetary assistance. While 80% of respondents over 65 believe their children face tougher economic conditions, 70% are unwilling to compromise their retirement lifestyle to offer financial support. This highlights the complex balancing act between supporting family and ensuring personal financial stability during retirement.
The survey also reveals that about half of the respondents would consider helping their children financially if it didn’t require them to leave their homes. Options such as reverse mortgages or home equity release could provide a viable solution, enabling retirees to stay in their homes while offering financial support. However, these methods are not without complications, including adverse effects on aged pension eligibility and financial penalties for large gifts.
Ben Hillier, AMP’s director of retirement, points out that current policies present significant barriers to intergenerational wealth transfer. High transaction costs, stamp duties, and pension means-testing are some of the obstacles that deter older Australians from providing financial aid to their children. Hillier suggests that legislative reforms could facilitate easier and more beneficial wealth transfers, ensuring support reaches younger generations when they need it most.
The study underscores a broader societal issue: the need to balance the financial security of retirees with the financial struggles of younger generations. By addressing policy barriers and promoting solutions like home equity release, Australia can create a more supportive environment for intergenerational wealth transfer, benefiting both retirees and their families.
To address the growing intergenerational financial challenges, legislative reforms and innovative financial solutions are necessary to enable older Australians to support their children without compromising their retirement security.
“You have this bipolar situation where while they do believe they’re struggling and they do want to help them, they’re not comfortable to do so at the expense of their own lifestyles.”
– Ben Hillier, AMP’s director of retirement
