A joint study from the Financial Services Council and ING Direct has found one in five Australians are relying on a cash inheritance from relatives to fund their retirement, rather than their own savings and superannuation.
“A large number are relying on a cash inheritance from parents or grandparents to plug the gap,” Lisa Claes, ING Direct’s executive director of customer delivery confirmed. “The message needs to get through that far from a guarantee, inheritance is not a sound financial plan.”
In addition, the study also found two in five Australians have no idea how much money is in their superannuation accounts. It also determined that most Australians underestimate how much they’ll need in retirement.
Sally Loane, the chief executive of the Financial Services Council, said most Australians will need 62.5 percent of their final annual salary to afford a comfortable retirement. However, she said most Australians will not have this amount.
“With super balances still low — at $70 000 for women and $110,000 for men — it is important that people begin engaging with their super fund and savings plans as soon as they get their first pay slip, to ensure they have enough money to sustain them in retirement,” she told The Huffington Post Australia.
Ms Claes agreed with this, adding that Australians should spend less time making plans for a potential inheritance and more time making practical plans for generating additional income in their old age.
However, the study’s troubling findings suggest many Australians need help to plan for their futures. That’s where Chase Edwards comes in. Speak to us today for a free no-obligation health check that can help you understand your true financial situation and put you on the path to generating the savings you need to fund the retirement you’ve always dreamed of.