The longer lifetimes and retirement periods predicted in the federal government’s “2026 Intergenerational Report” reinforces a growing need for complete financial advice, according to Focus Partners Australia.
Highlighting the report’s forecasts of longevity of 89.5 years for women and 86.1 years for men by 2065/2066, Focus Partners Australia head of wealth advisory David Lane noted the importance of proactive financial planning has never been greater.
“Longer lives mean longer retirement periods, increased healthcare and aged care considerations, and more complex intergenerational wealth transfer decisions,” Lane said.
“The financial decisions made today may need to support outcomes decades into the future.”
He pointed out qualified financial advisers can help Australians as they navigate longer retirement periods through integrated services covering everything from superannuation to estate planning and succession strategies.
Further he indicated as superannuation becomes the main source of retirement income, with the percentage of older Australians on the age pension falling from 66 per cent to 52 per cent by 2066, the provision of quality financial advice will become increasingly important.
Lane also recognised the intergenerational report found younger generations are facing new challenges, including slower wealth growth and barriers to entering the property market. As such he suggested they will also need tailored advice to build their financial future and may also look to their parents and older generations for assistance.
“Many families have become more active in planning for wealth transfer during life, rather than leaving large estates, and this trend is likely to continue to be more prominent,” he explained.
He acknowledged as families do this, Australia is set to experience the largest intergenerational wealth transfer in history which means financial advisers will have an especially relevant role to play when it comes to estate planning and intergenerational strategies.
“[These strategies] are becoming increasingly important to ensure assets are distributed according to wishes, tax implications are managed, and family members are supported,” he concluded.
