More Aussies anticipate renting in retirement: VanguardBY ANDREW MCKEAN | MONDAY, 17 JUN 2024 12:47PMAn increasing number of Australians expect to be paying off a mortgage or forced to rent in retirement, according to the latest Vanguard How Australia Retires survey. Vanguard Australia managing director Daniel Shrimski said after working hard and saving most of their lives, Australians want to feel excited about a financially secure retirement. However, he noted that nearly one in five Australians are renting in retirement, and 30% of working Australians expect to still be paying off a mortgage after they retire. "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 drawdown 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," he said. "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." Unsurprisingly then, cost of living was cited as being "front of mind" for many Australians. Retirees expect their retirement income needs to increase by $10,000 per year, while working Australians anticipate needing an additional $25,000 per year to cope with future living expenses. "With rising costs in all aspects of our lives, many Australians are already thinking they'll need to save more to afford a comfortable retirement," Shrimski said. The survey also found that Australians are increasingly worried their money may not last in retirement, with four in five of working Australians somewhat or very concerned about running out of money, and one in two retired Australians don't know how much money they can spend each year in order to not outlive their savings. "We've all heard about FOMO - Fear of Missing Out - now, there's FORO - Fear of Running Out," Shrimski said. "This also isn't helped when around two thirds of all Australians (67%) haven't thought about or don't know what age they'll need to plan for 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 research also highlighted the impact of planning and access to a financial adviser on retirement confidence. According to the survey, Australians with a financial adviser have a much better chance at a successful retirement. However, the most popular source of retirement information and guidance remains free online sources, such as Google, used by 42% of respondents. "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. Related News |
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