Boomers plan on using super to pay mortgages
Baby Boomers remain uncertain about their own ability to fund their retirements, with less than a fifth believing the recent moves to lift superannuation contributions would improve their position in the long term.
At the same time nearly a third will retire with a mortgage and a quarter will use their superannuation to repay their mortgage debt while a third will downsize to do the same.
The findings are part of the 2013 RaboDirect National Savings and Debt Barometer which is based on a survey of 2,322 Australians aged 18 to 65. It revealed the gap between the average current superannuation pot - $180,500 for Baby Boomers - and what they anticipate they will have at retirement - $316,700.
RaboDirect general manager Greg McAweeney said the latter figure was far short of the $749,800 amount people believe they would need to have to live for 20 years in retirement.
“The retirement shortfall is worsened by the fact that, generally, people aren’t planning for the improvement in life expectancy. For instance people who are now 65 are expected to live until 85 for a man and 87 years for a woman, and this equates to 20 years in retirement. And if you are younger than 65 you will live even longer than 20 years in retirement.”
The study also found that nearly half of Baby Boomers expected to run out of money during retirement, with similar numbers concerned about the prospect of retiring with a home loan.
“It’s only with planning ahead, and having a clear understanding of their financial position heading into pre-retirement and retirement, that people can then start to think about solutions.”
“Those who are a number of years away from retirement still have time to consider alternative savings strategies so they can avoid selling their homes or dipping into their super unnecessarily,” McAweeney said.
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