Older workers expect to retire with debt
(Australian Associated Press)
Almost half of older working Australians expect to retire with credit card, mortgage and bill debt after helping their children.
REST Industry Super research shows the “sandwich generation” are being squeezed financially by their children and parents.
The survey of 1048 Australians aged over 35 found one in four expected to retire with credit card debt, one in five with a mortgage and one in 10 with unpaid bills after helping children with tuition fees, home deposits and other expenses.
The Journey Begins report also showed those surveyed also are providing financial assistance to their parents with 14 per cent helping to fund medical or health expenses.
The findings show of the $507 billion cost of support provided by Australians, $109 billion related to payment for children’s or grandchildren’s education.
Everyday expenses made up the next biggest chunk of support at $93.1 billion, while $68.5 billion was forked out for home deposits.
REST CEO Damian Hill said the high levels of intergenerational dependency and debt with which old working Australians are retiring on is of concern, with the pressures of housing and education costs particularly hitting home in Sydney and Melbourne.
“As the majority of assets for older working Australians are locked up in the family home, carrying mortgage debt into retirement can be a cause of financial stress for retirees,” Mr Hill said.
“One in seven of people aged 35 to 49 are providing financial help to their children or parents and many underestimate how long they will live and plan to put off retirement in order to pay down debt.
“Some people plan to delay their retirement, but early retirements are going by the wayside.”
He said there was a big gap between what each generation expected to have for a comfortable retirement, but saving early was key.