Close to 20 per cent of retirees are still renting and nearly a further 10 per cent are still paying off a mortgage, according to a new Vanguard Australia report that highlights the value of superannuation in creating security in retirement.
The “How Australia Retires” report, based on a survey of more than 1800 Australians aged 18 and over in March 2024, found 18 per cent of retired Australians were renting and of those who own their home, 8 per cent were still paying a mortgage.
The percentage of retirees renting or with a mortgage was higher, at 31 per cent, for those not in a relationship, that is, separated, divorced, widowed or never married, compared to those with a partner, at 8 per cent.
The report also found that while younger working Australians expected they would own a home at retirement, around one-third would carry their mortgage into their later years.
Specifically, 32 per cent of working-age generation X respondents believed it was extremely likely or likely they will still have a mortgage in retirement, with 45 per cent of gen Z respondents to the survey who expect to own a home in retirement also stating they will still be paying it off.
Vanguard Australia managing director Daniel Shrimski said the survey results once again highlighted the value of superannuation and personal advice.
“Housing is either the largest or second-largest asset held by Australian households, so it’s also one of the most important contributors to a secure retirement,” Shrimski said.
“This is a bit of a sleeper issue when it comes to retirement. We tend to presume we’ll be homeowners and mortgage free, but having unresolved debt or needing to draw down on savings to pay rent is likely to be a big financial burden for many, especially if full-time paid work is no longer an option.
“This is why it’s so important that a robust superannuation balance is part of a ‘whole-of-wealth’ retirement plan so Australians can have confidence and security in retirement.
“Retirement is a critically important but complex phase of life for many Australians and while everyone’s individual circumstances, needs and preferences can vary widely, the one consistent factor is the role superannuation plays or will play in most people’s retirement.”
The survey also found one in two retired Australians do not know how much money they can spend each year in order to not outlive their savings and while willing to seek advice, most are doing so using free online sources.
“This is very concerning because we know quality financial advice can make a real difference to the retirement outcomes and experience for Australians,” Shrimski said.
“When it comes to retirement confidence, the research continues to show that planning and having access to a financial adviser gives Australians a much better chance at a successful retirement.”
