Millions of over-55s are failing to include their family in important decisions about their retirement income with potentially devastating consequences.
The Spring 2014 edition of Aviva’s Real Retirement Report explores the views of those from three distinctive stages of retirement – pre-retiree (aged 55-64 years), retiring (aged 65-74 years) and long-term retired (aged over-75 years). The report investigates the role of the family in retirement, and the way in which people consider their family in their retirement plans and their decision-making.
It reveals that while having a conversation with family members about retirement plans and wishes should be a crucial step, for many the idea of discussing financial matters is often off-limits. Many of the over-55s with family want to keep their financial position private, with more than a quarter (28%) of those with family saying they have not had a conversation with either their spouse or their family about their retirement finances.
Nearly two-thirds (64%) of over-55s say they have revealed their financial retirement plans to their spouse, but only a fifth (20%) have updated both their spouse and family on their plans. Among those that have not discussed their financial affairs with family, half (51%) feel it is a personal matter. A quarter of people (25%) say they have not had a discussion because they do not have a full view of their finances, which is highest among the 55-64s (32%).
More than a third (37%) say leaving some inheritance to make sure their family are provided for when they are gone, is important to them. Yet only 59% of over 55s have put a will in place, rising to 76% in the over-75s. Worryingly, while the family is important, less than a quarter (22%) have chosen options that provide some income to their spouse should they pass away. Although they wish they could provide some financial support to their family, 15% say they cannot afford to do so.
With guidance for consumers emerging as a key theme from this year’s Budget, the over-55s say they would most like assistance on how they can make the most of their retirement income (21%). Preparing for the possibility of long-term care also features on their list of things they would like guidance on (18%), rising to 33% in the over-75s. Only 5% are looking for guidance on how they can protect their families through their retirement choices.
The findings appear to reveal a stark difference between what people want to do about their retirement finances in respect of their families, and what they put into practice. The reality is that failing to address the needs of the family could mean they may lose out. Retirement planning offers the opportunity to maximise income from savings and investments, and to achieve the lifestyle people want for themselves and their families.