Spend it all, or leave an inheritance for the kids?

You’ve been saving a long time for your retirement. Should you spend up big and enjoy yourself? Or live frugally and leave as much as possible for the children? Decisions, decisions…


You’ve hopefully saved a substantial amount of money during your working life. If you think the money’s sole purpose is for you to enjoy as comfortable a retirement as possible, you are not alone. A study done by National Seniors Australia asked their members about their retirement income and plans found while a substantial proportion of seniors hoped to leave their children some money, their biggest priority was funding their lifestyle in retirement and making sure they didn’t run out of money. Only 3% planned to pass all of their savings onto the next generation, while 10% expected to have spent all of their money. 41% wanted to spend most of their savings and 46% planned to spend only some of it*. 

There is a trend towards helping children financially earlier in life so helping with things like home deposits. While there is no correct answer to the question we thought we’d look at some of the benefits of each option! 

Spend, spend, spend

  • Fun, fun, fun is the biggest advantage of this approach. Why be bartering with the butcher over cheap cuts of meat when you could be eating at great restaurants and travelling to dream destinations? No contest.
  • The kids won’t try to kill each other over the Will. We’ve all seen those movies where the Will pits offspring against each other. No inheritance = no fighting. In fact, the kids will probably bond over how selfish you were.
  • You’re doing them a favour. No one gave you anything (or if they did, let’s pretend they didn’t, for argument’s sake). It’s character building to make your way in life without any help.

Think of the children

  • It’s tough for young people. How are they ever going to buy a house - or a bigger house - without your help? If they’re really grateful they may name a wing after you.
  • Think of the grandkids – if it’s tough for your kids – imagine the challenges life has in store for the grandkids – and you could help give them a step-up in life! 
  • You find displays of gratitude embarrassing. Far better that the kids express their thanks after you’re gone.

The middle path

This may be best for everyone. As Warren Buffet wisely quipped, “Leave enough money to help your children do something, but not so much that they can do nothing.”

Use our Retirement Income Projector to work out your projected super balance and whether you’re likely to have adequate retirement income.

Need help?

If you need help planning out your retirement, contact TelstraSuper Financial Planning on 1300 033 166 or fill in our online contact form. There's no additional charge for our phone based service as this is included in your TelstraSuper membership.

https://www.abc.net.au/news/2017-10-05/seniors-more-likely-to-use-savings-than-leave-inheritance-survey/9014800

Any general advice has been prepared without taking into account your objectives, financial situation or needs. Before you act on any general advice, you should consider whether it is appropriate to your individual circumstances. Before making any decision, you should obtain and read the relevant Product Disclosure Statement and Target Market Determination or by calling 1300 033 166. You may wish to consult an adviser before you make any decisions relating to your financial affairs. To speak with an Adviser from TelstraSuper Financial Planning call 1300 033 166.