Retirement realities and inheritance expectations growing apart: CFS

As it stands, Australia is set to experience a mass wave of retirement and wealth transfer. The famous bank of mum and dad will be one of the core ways this wealth is transferred, with many older parents looking to financially assist their children in this transition.

However, the data released by CFS has highlighted that perhaps young people might be expecting a little too much from their parents.

Based on a survey of 2,250 people, CFS has found that nearly half of Australians aged between 18–29 are expecting an inheritance, with the average anticipated amount being over $525,000. This number is nearly double the amount expected by those aged between 50–64.

While it might be easy to dismiss this as young Australians being entitled, CFS encourages a different viewpoint. As cost-of-living pressures rise and wages fail to keep up, it’s a reflection of the fact that younger Australians are increasingly turning to their parents looking for help.

“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,” said Kelly Power, CEO of CFS Superannuation.

“At the same time, older generations are navigating the complexities of retirement planning. They want to support their families while ensuring their own financial security. It's a delicate balance that requires careful planning and open communication.”

The data found that lack of financial planning from many older Australians also contributes to this gap in inheritance expectations. According to CFS, most do want to leave their children with something; however, only 38 per cent have a will, “raising questions about how and when assets will be passed on”.

Those who do have wills generally appear to be quite selective with what they bequeath, with family homes, vehicles and leftover superannuation topping the list. However, investment portfolios and other property are largely held as retirement income.

According to Craig Day, CFS head of technical services, this shift reflects a broader trend among older Australians who are looking to leave a legacy while also trying to fund a retirement that could last up to three decades.

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

“Young people may be overestimating the size and certainty of future inheritances. As their parents enter retirement, the focus could be shifting from wealth transfer to sustaining a modest, debt-free lifestyle.”

Financial advice is key in this space, not only helping older Australians achieve those retirement goals, but bringing their children’s expectations in line with reality.

“It’s important that young and old can discuss their expectations and plans openly. By having these conversations early, families can ensure that everyone is on the same page and can make informed decisions that align with their values and goals,” Day said.

“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.”