Queensland couple Carole and Adrian Chick found themselves approaching retirement with $150,000 debt and uncertainty over what came next. (Source: Supplied)
The idea that Aussies can pay off their home loan, accumulate superannuation in the background and be set up for a comfortable retirement is no longer a given, a financial adviser has warned. More Aussies are approaching retirement with mortgage debt, with the trend expected to continue as Aussies buy later in life and take out bigger mortgages, all in the face of stubbornly higher interest rates.
Queensland couple Carole and Adrian Chick spent decades running a newsagency and had assumed their retirement would take care of itself. But as they approached 60, they had a mortgage on their Gold Coast home and a business loan worth a combined $150,000 and realised they had no strategy for what would come next.
“We didn’t think we were in a position to do anything really, other than finish renovating our house, sell it and maybe buying something smaller and then just using the money and hoping it would outlive us,” Adrian told Yahoo Finance.
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Financial adviser Gareth Croy said it was a common situation he was seeing among older clients – asset-holding, equity-rich Aussies who were relying on a strategy that might have worked for their parents or grandparents but is no longer relevant today.
“That is the misconception of general Australia,” the Your Future Strategy managing director told Yahoo Finance.
“A generation or two ago, if you worked hard, paid off your home loan and got to retirement, that was success, and it probably looked like a comfortable retirement.”
Croy said people were entering retirement assuming the capital they had in superannuation would be enough to sustain their pre-retirement lifestyle.
“In a lot of cases, that is just simply not the case,” he said.
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A growing number of Aussies are facing their retirement years with mortgage debt. Census data found that over the past 20 years, the number of Aussies aged 55 to 64 who own their homes outright has nearly halved.
Research by Digital Finance Analytics in 2024 found that about three-quarters of retirees with a mortgage owed more than they had in superannuation, while more than 50 per cent of 55 to 65-year-olds planned to sell their property or use their super to repay their mortgage.
The average loan balance for older Aussies with a mortgage was about $190,000, but some owed up to $500,000.
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