Financial advice essential for debt-free retirement, says wealth manager
An increasing number of Australians are retiring with mortgage debt, driven by rising property prices and ongoing cost-of-living pressures, according to new data.
Research from wealth management group Colonial First State (CFS) shows that 14% of current retirees still carry debt, while that figure doubles to 28% for those aged between 50 and 64. The findings suggest that this trend could continue, with more Australians entering retirement without owning their homes outright.
The Rethinking Retirement report found a strong link between financial advice and confidence in retiring debt-free. Of homeowners surveyed, 45% felt confident about retiring without mortgage debt. That number rose to 63% among those who had received financial advice.
“Australians who have received financial advice are significantly more likely to have a more positive outlook on their financial situation,” the report said.
The study also found high interest among Australians in financial education, with 70% open to receiving goal-setting support from their superannuation fund. Similarly, 72% said they would be willing to share their financial goals with their super fund, indicating a strong appetite for guidance.
Craig Day (pictured above), head of technical services at Colonial First State, said advisers often focus on using superannuation to manage debt in later life.
“There’s two options here for people, you can pull out a lump sum, or you can retain all of your super into retirement, and then utilise your retirement income stream to help repay your loan over a longer period,” Day was quoted as saying in a 9News article.
“It’s a really important piece of the jigsaw. Superannuation is the most critical. It’s the most important asset you have.”
As older homeowners face growing financial strain, industry experts say access to quality advice and proactive retirement planning will be key in reducing long-term debt burdens.
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