New data highlighted that 23% of Aussies are waiting on inheriting money from their parents while currently making ends meet in order to 'have a good life'.
The research was commissioned by money expert Vanessa Stoykov, revealing that from the 1,000 people surveyed, 64% of Australian parents are planning on leaving their inheritance to their children.
The majority (57%) planned to leave everything; 19% planned to leave the family home; and 13% said they would leave their savings to their kids.
When asked what they would do with their inheritance, 39% of respondents said they would put it into their savings.
This was followed by 34% saying they would invest it and 16% saying they would buy something they couldn't currently afford.
The findings were 'similar' across all ages, genders, and across Australia. However, the people most heavily pining on inheritance were found to be from people in New South Wales and Western Australia (26%); with the lowest reliance from Queenslanders (16%).
Ms Stoykov said it's a 'promising sign' that many Aussies would spend their inheritance wisely, bringing up the estimated $3.5 trillion in wealth that is set to be passed down to 7.5 million children over the next 15 years.
This means that if 70% of the wealth is transferred, the average Australian could have $320,000 passed onto them according to Ms Stoykov.
"This huge transfer of wealth from one generation to the next is being dubbed ‘the economic tsunami’, and it has the potential to be extremely positive or negative for Australians, depending on how they decide to spend this money," Ms Stoykov said.
"Given Covid-19 and the impact it's had on peoples' finances, making the right decision is more crucial than ever."
Expert tips on how to use inheritance money
Ms Stoykov provided her tips on how to prepare for inheritance money that might becoming your way.
First, she said to start by thinking about how the money can help create the life you want; whether you're the person leaving the money or on the receiving end.
And second, Ms Stoykov said it's important to consult a financial planner, as many people don't realise money inherited is normally considered taxable income.
"For example, if you sell a property received from your parents, there could be capital gains tax (CGT) consequences, so speaking with an expert to avoid being caught off guard is important," Ms Stoykov said.
She said that paying off high-interest debt such as credit cards and mortgages are 'simple' ways to reduce interest.
Ms Stoykov also said increasing your super balance can be a very tax-effective way to ensure you can afford retirement.
Lastly, she said giving back by donating in a structured way is good for the world and for ourselves.
"If even a small portion of the wealth that is about to be transferred went to giving back, the entire country would benefit immensely," Ms Stoykov said.
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