Every generation believes it has it tough financially.

Young Australians complain about housing affordability. Middle-aged Australians worry about mortgage repayments and childcare costs. Older Australians worry about having enough money to last them through retirement. They all have a point. 

The financial challenges facing Australians are remarkably predictable through the demographic lens. Our age determines what we earn, what we spend, what we save and what we worry about. 

Over the coming decade, six generations face six very different financial headaches. Understanding these challenges helps explain why governing Australia is becoming increasingly difficult (see last week’s column). 

Let’s start with the oldest Australians and work our way down the population pyramid. 

The generation paying for care

The silent generation or pre-boomers (born before 1945, aged 81-plus) 

The oldest Australians face a financial challenge – the cost of becoming very old.

Age 85 is an important demographic milestone. Around half of Australians aged 85 and over require assistance with everyday activities, depending on how care needs are measured. 

As people move through their late 80s and 90s, the probability of needing regular support rises sharply.

Some people can live their whole lives without needing care. Some older Australians can remain at home with assistance from family members or professional carers. Others require residential aged care. All care comes at a cost. 

Home-care services, modifications, medical appointments and mobility equipment can consume significant financial resources. Residential aged care can involve substantial accommodation and ongoing care contributions. 

Financial management itself can become more difficult as cognitive decline increases the risk of scams, exploitation and poor decisions. How long should you trust yourself in handling your finances? Who takes over and when? 

Meanwhile, families must navigate estate planning, inheritance expectations and sometimes ugly disagreements over how assets should be used. 

The Silent Generation’s central financial challenge is no longer accumulating wealth. It’s ensuring that their remaining resources provide dignity, security and appropriate care. 

The generation learning wealth isn’t income

Baby boomers (born 1946-1963, aged 63-80) 

Collectively, baby boomers are Australia’s richest generation.

Many boomers benefited from decades of rising property prices and compulsory superannuation, but averages conceal enormous differences. 

A boomer who owns a valuable home outright and has substantial superannuation faces a very different retirement from a renter relying on the Age Pension. 

Over the next decade, the central financial challenge for boomers will be converting accumulated wealth into reliable retirement income. 

The typical boomer will easily be retired for more than 25 years. Savings must stretch across decades of inflation, market fluctuations and changing spending patterns. So far retired boomers continue to........

© The New Daily