- Rest’s research reveals retired mothers are nearly twice as likely as retired fathers to need help with medical expenses and nearly three times as likely to need assistance with making rent payments
- One in three Australians who currently support their mothers in retirement believe this support is required due to their mother’s selflessness in putting her family’s financial needs ahead of her own
- Rest calls for the adoption of recommendations made to the Senate Inquiry into the Economic Security for Women in Retirement to improve the retirement income of carers and build a safety net for low paid workers
Research released today by Rest, one of Australia’s largest superannuation funds with around two million members, of which three in five are female, reveals the great lengths Australian children go to in order to financially support their parents in retirement.
The launch of this research coincides with the release of the findings of the Senate Inquiry into the Economic Security for Women in Retirement, which recommends the Government adopt key elements of a submission made by Rest, including improving the retirement incomes of carers and retaining the Low Income Superannuation Contribution beyond 30 June 2017.
The most common types of financial support Australians provide their retired parents is with home expenses (82.3%), medical expenses (70.5%) rent payments (60.6%) and mortgage payments (36.7%).
Retired mothers were nearly twice as likely as retired fathers to need help with medical expenses and nearly three times more likely to need assistance with rent payments and home expenses.
According to Rest General Manager Brand, Marketing and Communications Mary Atley, a few small changes may help Aussie mothers enjoy a financially secure retirement.
“As a fund we’re focused on empowering mums to take small actions today, such as consolidating their superannuation accounts, in order to create a more financially secure future,” said Ms Atley.
More than one in three Australians currently supporting their mothers in retirement believe this is because their mum put the family’s financial needs ahead of her own. This was first covered in Rest’s 2015 Super Mum index, which revealed that putting family first means two in five Australian mothers risk financially burdening their children later in life by inadequately saving for retirement.
The intergenerational dependency observed in this new research is a self-perpetuating trend, with the majority (63.2%) of Australians who support their own parents in retirement believing they’ll need to rely on financial support from their own children in retirement.
“There’s no easy fix for this problem, but adopting the recommendations of the Senate Inquiry into the Economic Security of Women in Retirement is a strong first step to help more women enjoy a comfortable standard of living in retirement,” continued Ms Atley. “We’re encouraged that the Government may consider adopting key recommendations including improving the retirement income of carers, the removal of the $450 monthly income threshold for exemptions on compulsory superannuation contributions and the creation of a more robust safety net to support low paid workers.”
The research also found that three in five (60.2%) of Australians supporting their parents financially in retirement have made a change to their own housing situation to do so, whether through building a granny flat for one or both of their parents (17.9%), moving in with their parents (17.8%), or moving into a smaller dwelling (15.3%).
“Making a change to your housing situation seems to be the preferred way for Australians to free up cash to support their retired parents financially,” said Ms Atley.
“What we’d encourage individuals who are supporting their parents financially in retirement to do is put a little extra aside in their own superannuation account, to help end this cycle of dependency.
“For Rest members who are concerned about their financial security in retirement, or that of a loved one, there are resources on our Knowledge Hub which can help with planning for a financially secure future,” concluded Ms Atley.
Top five super tips
1. Don’t double up
Surprisingly, many Australians have more than one super fund, meaning they’re paying a few sets of fees. If there is no need to have more than one fund, you can avoid this extra cost (and confusion) by combining all your super funds together*.
2. Have the conversation
Work super into your chats with family and friends. It may not seem like the hottest topic to bring to the dinner table, but the earlier you and your loved ones start thinking about your financial situations later in life, the more time you’ll have to prepare.
3. Take care with career breaks
With women typically taking time off work to start a family, making personal contributions to your super before, during or after a career break can help balance out your time away from employment.
4. Maximise a pay rise
What better time to top up your super than when your salary is set to increase? This way, you’ll be less likely to miss it, and will have it available to you when you need it at retirement. And don’t forget you may be able to take your super with you if you’re switching employers.
5. Defer to an expert
This is where the ‘fake it till you make it’ rule doesn’t apply. Rather than gamble with your retirement savings, check with a financial planner to make sure your investment option is right for your age and situation. Rest Advice Online provides Rest members with live webchat and over-the-phone support from qualified advice specialists with Rest as well as enabling members to make immediate changes to their super account from any mobile device.#
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| Natasha Nikolovski Account Manager, Kite Communications natasha@kitecommunications.com.au t: (02) 9640 8013 m: 0432 074 355 |
Pauline Hayes Corporate Communications Manager, Rest pauline.hayes@rest.com.au t: (02) 9086 6348 m: 0458 815 252 |
About this research
This research surveyed 1052 Australians aged over 18 who are currently providing financial support to their retired parents, and was conducted between 14 April and 24 April 2016 by third party research house Pure Profile.
About Rest and the Inquiry into the Economic Security for Women in Retirement
In October 2015 Rest, one of Australia’s largest super funds by membership with over $37 billion in funds under management as at 30 June 2015 and around two million members, made a submission to the Inquiry into the Economic Security for Women in Retirement. This submission argues that to ensure women have an equal opportunity to achieve financial security in retirement, Australia must have a superannuation system that is fit-for-purpose.
With 62%, or three in five, of the fund’s members being female, Rest considers the following key policy areas instrumental in achieving this outcome, and reinforced this point of view in a public hearing of the inquiry in Sydney on 12 February 2016. These policies include:
- Increasing the incentive to contribute to superannuation in a targeted way
- Engaging, educating and empowering women to make informed choices about their superannuation
- Valuing unpaid caring responsibilities
- Creating robust safety nets to support low paid workers.
This material doesn’t take into account your circumstances. So, before acting on it, you should consider whether it is appropriate for you. Before making a decision about your super, please read the relevant Product Disclosure Statement available at www.rest.com.au. This information is provided by the issuer, Retail Employees Superannuation Pty Limited, ABN 39 001 987 739 as trustee of Rest (Retail Employees Superannuation Trust ABN 62 653 671 394).
# Rest financial advice is provided by Rest advisers as authorised representatives of Adviser Network Pty Limited AFS Licence 232729 ABN 25 056 310 699.