Retirement savings could lie at the heart of a growing number of estate disputes, as figures suggest that an increasing number of people are leaving behind their superannuation when they die. Research carried out by superannuation advisors Rice Warner indicates that as much as $8.5 billion will be left to beneficiaries this year alone, as retirees have not had sufficient time to use their pension funds.
In a report from AFR on Friday May 29, it is claimed that the average amount of assets owned by retirees is only likely to rise. At present, Rice Warner consultant Nathan Bonarius estimates that the average Australian reaches the age of 80 with assets totalling $110,000. However, this has the potential to reach $300,000 just 15 years down the line.
Figures from ASFA appear to agree, as the group also revealed that the nation's superannuation assets are growing. During the three months to March this year, super fund assets reached $2.05 trillion, making it the highest level on record. Over the 12 months to March, a 14.3 per cent increase in total superannuation assets was registered.
With the cost of living on the rise, it makes sense that retirees need more in their super funds to meet their standard of living. Data from the Australian Bureau of Statistics shows that between the March quarters of 2014 and 2015, living costs for pensioners living in the nation's capitals increased 0.9 per cent. For age pensioners, the rise stood at 0.8 per cent. While these increases are less than the consumer price index, they nevertheless put more pressure on retirement savings.
Mr Bonarius explained that having retirement savings left behind isn't necessarily a bad move, even though it can lead to inheritance and estate disputes at a later stage. The challenge is for people to ensure they have sufficient money to lead the lifestyle they want, without running the risk of being without money during the latter part of their retirement.
He told AFR: "You wouldn't aim to spend all of your money by life expectancy, and pensioners are quite rational to behave that way."
Increased retirement savings mean that retirees need to make sure that their assets are distributed in line with their wishes. In order to do this, having a valid will in place is essential. This should cover all aspects of an estate, ranging from who the property is inherited by right through to how cash assets will be allocated.