Friday, August 17, 2012

33% of Aussie baby-boomers to retire facing mortgages

Around 33 percent of Australia’s baby-boomers will still be paying off their mortgages when they retire, shattering any plans of spending their retirement savings on themselves, according to a survey by RaboDirect.

To deal with the “mortgage hangover”, many borrowers aged 55 and upwards will have to sell their homes or use their superannuation lump sum to pay off the loan.

Moreover, about 40 percent of those who still have mortgages when they retire plan to sell their homes, pay off the loans and hopefully acquire a more affordable property, said RaboDirect’s Renee Amor.

“Baby-boomers are feeling the pinch and are the most pessimistic of all generations about the nation’s economic outlook,” Amor added.

David Chalke, Social Analyst at Strategy Planning Group, said that many baby-boomers are financially unprepared and it took the 2008 global financial crisis to make them realise it.

“They’ve been known as the lucky generation, they missed the Depression, missed the war, basically they’ve had 60 years or so, apart from the odd hiccup, of relative good economic times.”

“Now they are probably looking back over the past few years with the collapse of the share market and low investment returns and they have only just realised that things are pretty thin,” noted Chalke.

View the original article here

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