Financial danger: The addictions ruining our seniors
RETIREES are splashing out on river cruises and luxury cruises prompting fears they could run out of money before "running out of life".
This new financial danger is emerging for many of Australia's 3.7 million over-65s, and their children aren't happy about it.
Wealth specialists are noticing a rise in people in their middle retirement years going on spending splurges as they start to feel the effects of ageing.
Some risk running out of money, or causing family conflict as their children think that mum and dad are wasting resources or their inheritance.
HLB Mann Judd Sydney's head of wealth management, Michael Hutton, said extravagant holidays and luxury cars were among the things bought by big-spending 70-somethings, and the current boom in ocean and river cruises was evidence of the trend.
"There's an element of spending the inheritance - kids in their 40s often might be doing it pretty tough with mortgages and school fees, when parents are living it up," he said.
"Sometimes their children are giving them a hard time about their spending because the children already think of the money as theirs."
Mr Hutton said spending was fine for those who could afford it but it was a mistake for retirees to think they would need less income in their latter years.
"Healthcare costs can rise dramatically after the age of 70," he said. And aged care has become more user-pays with large upfront charges for high-quality care.
Social researcher Mark McCrindle said there was a risk that older people would run out of money "before they run out of life".
Bureau of Statistics figures showed today's 75-year-old males would live another 12.1 years on average, while females the same age would live 14 years, he said.
"Those final 14 years are very expensive ones."
The costs of housing and lifestyle were also climbing, Mr McCrindle said.
There was a big trend of "downageing", where people were younger in attitude than age, he said.
"That's why we are seeing the rise of the bucket list, the travel and the spending splurge."
Mr McCrindle said while some adult children were relying on a financial legacy, others felt "it's your life, you earned it" while many were simply anxious about their parents' welfare.
Australian Centre for Financial Studies research last year found that retirees aged 75-84 were spending 30 per cent more than a decade ago.
Certified financial planner Patrick Canion said while younger retirees spaced out their spending, those in their mid-70s often felt it was their last chance to enjoy big expensive holidays.
"They get addicted to cruising," he said.
"Sometimes the kids don't want to be in a position where they are torn between mum and dad having less than ideal care or them having to find the money to fill the gap."