More young Australians banking on inheritance | Australian Markets

New analysis from Colonial First State (CFS) has highlighted a hole within the retirement expectations of youthful Australians versus the “realities” of their older kinfolk, with many now relying on an inheritance to secure their funds.

A survey of 2,250 Australians indicated that just about half of the 18-to-29-year-old cohort count on an inheritance, at an average quantity of over $525,000. This is nearly double the quantity anticipated by these aged 50 to 64 years outdated.

Kelly Power, CFS Superannuation’s chief government, stated the outcomes counsel youthful Australians have underlying considerations concerning the stability and security of their financial futures and are looking for alternate sources of consolation.

“Young people are hopeful about receiving financial support in the form of an inheritance due to rising living costs, stagnant wage growth and housing pressures,” she stated.

“At the identical time, older generations are navigating the complexities of retirement planning. They need to help their households whereas guaranteeing their own financial security. It’s a delicate steadiness that requires cautious planning and open communication.

“Sitting down with a financial adviser can be hugely valuable for families as they navigate the unique financial challenges of different life stages.”

According to the survey, solely 38 per cent of respondents have a will regardless of the bulk agreeing they plan to go away an inheritance. The outcomes have raised questions concerning the cut up of property between an inheritance and retirement income, with the household home, autos and remaining superannuation falling below the inheritance umbrella; investment portfolios and different property had been largely chosen for retirement income.

CFS’ Head of Technical Services, Craig Day, stated the survey highlights the mentality shift in older Australians as they’re more and more pressured to decide on between “leaving a legacy” and funding their retirement.

“With longevity increasing, many people may need to start prioritising financial security over inheritance planning,” Day stated.

“Young people could also be overestimating the dimensions and certainty of future inheritances. As their dad and mom enter retirement, the main target may very well be shifting from wealth switch to sustaining a modest, debt-free way of life.

“It’s important that young and outdated can focus on their expectations and plans brazenly. By having these conversations early, households can make sure that everyone seems to be on the identical web page and might make knowledgeable selections that align with their values and objectives.

“It’s not just about passing on wealth—it’s about passing on clarity. Families need to talk about their intentions, their needs, and their plans. That’s where advice becomes invaluable.”