According to a survey of 1000 employed people over the age of 50 conducted by REST Industry Super, a large proportion of people will use their superannuation to help their children enter the property market.
According to REST INdustry Super, 21% of respondents said they would draw from their superannuation to provide their children with a deposit for a house.
It appears those coming close to retirement hold grave concerns about the ability of their children to ever buy their own homes, with 32% or respondents saying they would pass on any inheritance they receive to their children to help them buy a house.
While helping their children may seem like an admirable goal, those approaching retirement have been warned about the possible side effects of digging into their savings.
“What comes through clearly is the desire of people approaching retirement to ease the financial burdens their adult children face today, especially buying a house and covering school fees,” REST Industry Super chief executive officer Damian Hill said.
“That’s laudable but we would urge retirees not to forget that their retirement savings are first and foremost meant to fund their own retirement, and using retirement savings for other purposes may mean they become a financial burden on their own children later in life,” Hill said.
According to the survey, there is also some scepticism surrounding the effectiveness of self-managed superannuation funds (SMSFs).
Of the respondents to the survey who have an SMSF, 25% said they wouldn’t have set one up had they known the work required to manage it, while over a third said they believed their SMSF had made money for their accountant than themselves.
“This suggests self-managed super funds aren’t appropriate for everyone,” Hill said.
“The cost to maintain an SMSF, both financially and in terms of time, is significant and usually more than what people think.”
