As the first of the Baby Boomers turn 65 this year, RaboDirect has found that of the 4 million or so people in this generation, one in five will retire with an outstanding debt on their homes.
Worryingly, of those retiring with a mortgage, over a quarter intend to pay off the loan with their super. And all this against a backdrop of extreme share-market volatility and economic uncertainty, continuing to put increased pressure on Boomers’ superannuation funds.
While not all bad, the financial picture for Baby Boomers is less than rosy. According to the latest RaboDirect National Savings and Debt Barometer (NSDB), Boomers feel economically worse off and more concerned about their financial future than their Generation Y counterparts.
- 1 in 5 Baby Boomers are approaching retirement age with a home loan still to pay off
- Over a quarter of Baby Boomers retiring with a mortgage intend to pay off the loan with their super
- 48% of Baby Boomers feel their financial situation has worsened in the last 12 months
- Almost half (48%) of Baby Boomers keep their savings in transaction accounts and are missing out on potential interest available via a High Interest Savings Account
- Almost a quarter of Baby Boomers either didn’t save in the last year, or don’t have any savings
- A third of Baby Boomers have not drafted a will
Greg McAweeney, Executive General Manager of RaboDirect Australia & New Zealand said, “It’s clear that, as a nation, we need to address our debt issues and set in place some common sense strategies to help us all build the kind of future we hope for. It’s the role of all of us – government, banks, the community and individuals – to ensure that Australians of all ages are educated about the financial basics, are guided by conscionable lending practices and have access to reliable, inexpensive financial advice.”
“We say it’s time we put the boom back into the Baby Boomers. And there is no time to waste. As the first of this generation head into retirement, some of the big issues are coming home hard and likely to affect us all. Almost 25% of baby boomers have little or no savings. So out of our boomer population pool of four million, 1 million have no money in the bank. Which begs the question, will Australia’s aging population be relying on taxpayer assistance to survive in retirement? We need to stand up and take note of this situation and get all generations to think about their financial future. Without proper planning we will never be able to break this cycle of debt.”