- 7 Sep, 2017

More Aussies are Using Their Super to Pay Off Mortgages

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Research suggests that many Australians are using their superannuation to pay off their home loans. This approach, says the data, is due to rising home prices. In fact, most Australians feel that they’ll enter retirement with considerable debt. But, this doesn’t need to be the case with planning.

Australian Debt

The 2017 MLC Wealth Sentiment Survey revealed 32% of respondents feared not having enough money for retirement. This figure rose 8% when compared to the 2016 survey. Other survey findings include:

  • Most Australians felt the retirement they’d have would be completely different to the one they wanted due to funding.
  • Some 21% of Australians plan to pay off more debt over the next quarter.
  • 26% of respondents aimed to save more.
  • Many Australians were looking critically at debt and how they could better save for retirement.
  • 62% of women said they didn’t think they’d have enough to retire on. In comparison, 52% of men said their retirement fund wouldn’t be adequate.
  • Three in 10 Australians felt comfortable borrowing to invest. One-third of these invested in property.

Retirement Funds

With many Australian’s feeling they won’t have enough to retire on, it’s important to understand why. Understanding this enables you to then find ways to improve your own retirement options. A snapshot of Australian wealth behaviours, according to the MLC Wealth Behaviour Survey are as follows:

  • Six in 10 Australians feel they won’t have enough to retire on.
  • To retire comfortably, Australians felt they needed $1.1 million – excluding the family home – at retirement.
  • Most Australians felt they’d have around $638,000 – excluding the family home – to retire on. This amount results in a shortfall of over $500,000.
  • Investment property was the preferred vehicle for most Australians. Most planned to invest in property within the next 12-months.
  • Some 15% of survey respondents owned their home outright. Another 40% owned a home with a mortgage.
  • The average Australian has $497,000 in equity in their family home.

Super Paying Off Debt

The 2017 Household, Income and Labour Dynamics in Australia Survey (HILDA), indicates many Australians use super to pay-off debt. The survey found:

  • Approximately 9.9% of men who retired used super to pay-off a home loan and 13.1% of women.
  • On average men used $235,000 of their super to pay-off debt.
  • Women spent around $120,500 of the super paying-off debt.

Experts said they felt rising property prices influenced the number of Australians using super to pay-off debt. Also, many men and women were retiring later in life so they could repay more debt. The average age for women retiring was 64 years, and men 66 years.

The latest Australian Bureau of Statistics (ABS) figures indicate that retirees withdrawing lump sums from their super have doubled over the last 10-years. In 2013-14, some 376,000 retirees – aged 55-years and over – made a lump sum withdrawal. This figure was just 162,000 in 2003-04. The ABS suggest that 26% of these retirees invested in their home, while another 19% invested elsewhere. Data also showed some 15% of 60 to 64-year-olds had more than $100,000 in outstanding home mortgage debt.

So how can you avoid retirement debt?

Overall, planning for retirement will allow you to avoid using your superannuation to pay-off your mortgage. Planning 10 to 15-years before you retire should give you adequate time to get your finances in order.

Do you want to know more about investing in property for retirement? Then contact eChoice, we can help you plan for a sounder retirement. Our brokers have access to 100’s of home loan products, so we’ll find you the right mortgage.


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