Retirees are panicking and spending big because they fear they will run out of time before they run out of money, say Australian money experts.
Buying luxury river cruises seem to be the big-ticket item as retirees feeling the effects of ageing splurge on once-in-a-lifetime experiences.
“They get addicted to cruising,” said financial planner Patrick Canion.
This “addiction” is threatening the life savings of many retirees. And their children are worried that their inheritance is being spent.
“There’s an element of spending the inheritance – kids in their 40s often might be doing it pretty tough with mortgages and school fees, when parents are living it up,” said HLB Mann Judd Sydney’s Head of Wealth Management, Michael Hutton.
“Sometimes their children are giving them a hard time about their spending because the children already think of the money as theirs.”
He went on to say that this type of spending will leave many without enough money for their later years, which are typically more expensive.
“Healthcare costs can rise dramatically after the age of 70,” said Mr Hutton.
However, not all kids are playing “Scrooge” to their parents’ retirement spending, with social researcher Mark McCrindle saying that while some adult children are expecting an inheritance, many believe their parents have earned the right to spend their money as they see fit.
Some children were just concerned about their parents’ welfare in later life, knowing that health-care costs can be quite high.
“Sometimes the kids don’t want to be in a position where they are torn between mum and dad having less than ideal care or them having to find the money to fill the gap,” said Mr Canion.
Are you worried that you’re spending too much? Will you leave your kids a financial legacy? Do you feel you’ve earned the right to spend your money however you like?
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