Retiring with debt? You’re not alone

February 28th 2024 | Categories: Retirement | Debt Management |

Recent data shows that Australia is facing the largest debt generation of approaching retirees.

The retirement landscape has undergone a significant transformation in recent years, with a growing number of Australians entering their golden years burdened by substantial levels of household debt. A recent survey conducted by AMP shed light on the financial concerns of Australians aged 50 and older, revealing a stark reality: 

Only one in seven individuals believe they will retire mortgage-free.

One in nine anticipate carrying more than $250,000 unpaid debt, into retirement.

This revelation has prompted many financial industry experts to issue warnings about the potential challenges that retirees laden with debt may face. As household debt continues to rise, the impact on retirement planning becomes increasingly complex, further necessitating the need for a tailored, strategic approach to ensure financial security and support during the later stages of life. 

How to: finding a financial adviser you can trust

Is the Australian dream, still achievable? 

For generations, the Australian dream has been synonymous with debt-free homeownership, a key pillar in providing the financial foundation and security for a comfortable retirement. However, as the landscape evolves, research indicates that an increasing number of Australians are set to retire with rising levels of household debt. This shift challenges the conventional narrative and calls for a reevaluation of what financial ‘success’ is and future-proof retirement planning strategies. 

The alarming statistic 

Data from the Australian Bureau of Statistics (ABS) paints a concerning picture of the trajectory of household debt in the country.  In the space of the last two decades, average household debt skyrocketed from $62,000 to a staggering $242,000. This almost fourfold increase has profound implications for retirees, who now find themselves making lifestyle sacrifices to cope with the rising cost of living and the pressure to pay off mortgages. Furthermore, one-third of Australians are concerned their primary source of retirement income, their superannuation, won’t provide an adequate lifestyle in retirement.   

The solution  

As we often say, a goal without a plan is just a wish. With retirees, and upcoming generations grappling with mounting debt and fluctuating interest rates – the crucial need for a strategic, tailored financial plan has never been more evident.  

With a holistic approach to financial planning, Invest Blue is in a unique position to help with more options to offer in the retirement space than ever before. If you are concerned about your ability to retire with confidence – book a complimentary, no-obligation consultation with one of our advisers today.  

Needing to discuss retirement options with loved ones? We’ve created the Retire with Confidence eBook as the ultimate retirement guide. Download and share, here.  

You may also be interested in our articles:

• Retire with confidence – overcoming your retirement fears
• 8 retirement mistakes and how to avoid them
• Living off investment properties in retirement
• Sowing the seeds for a happy retirement
• Retire with confidence – discover the new generation of retirement income streams

What you need to knowThis information is provided by Invest Blue Pty Ltd. (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice regarding those matters and seek personal financial, tax and/or legal advice before acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.