New research has revealed retirees are concerned age care will erode their financial position or their children’s inheritance, reducing their confidence to spend their savings during their golden years.
Following a survey conducted earlier this year by Dynata of 2000 Australians aged 50 and over in relation to their attitudes to retirement, aged care and intergenerational wealth transferral, AMP found the underlying sentiment was that retirees lived more frugally than needed.
Three-quarters of survey respondents said they were not ready to move into aged care as they expected it would diminish their wealth and children’s inheritance, while seven in 10 worried about the cost of care.
The survey also showed many seniors preferred to avoid aged care and around 60 per cent wanted to remain living in the family home, while 50 per cent wanted to receive in-home care.
Half the interviewees also misunderstood what government assistance was available to them in an aged-care setting.
AMP noted the research highlighted the challenges facing Australians heading into retirement and that many lacked the financial confidence to spend in retirement, which was consistent with the 2020 Retirement Income Review, which found many older Australians were passing away with the bulk of wealth they had at retirement intact.
The financial services firm pointed out the research findings were indicative of the questions financial advisers were most often asked by clients about aged care, including what was the cost and could they afford it, and how would their aged-care choices impact their social security entitlements.
AMP retirement director Ben Hillier said: “As this research highlights, our industry must continue to innovate to provide Australian retirees with the financial confidence they’ve worked their lives to achieve.
“That means removing any financial concerns older Australians may have about aged care and providing confidence that they’ll be able to fund the cost of care if needed.
“This can be achieved through lifetime income solutions that will help more Australians look forward to a better standard of living and a higher rate of ongoing income in retirement.
“It also includes better access to financial advice, improved financial literacy at all ages and a simplified retirement system.”