[The Australian] Super staring at a ticking housing time bomb — the mortgaged retiree


Two very important research

  1.  The number of homeowners heading into retirement that still have a mortgage has tripled since 1996 to 45 per cent. (economist Saul Eslake) using census data and broader ABS housing data to build figures to be used by the Australian Institute of Superannuation Trustees 
  2. The portion of Australians who believe their savings will not carry them through retirement is now the ­majority. (Recep Peker, head of research at Investment Trends



What will this group do on entering retirement?

“They are likely to apply at least some of their accumulated superannuation to discharge the debt” (once you are over 65 you can spend your superannuation money — it is no longer preserved.)


In turn this creates a new problem: wealth in superannuation ­accounts will be lower than forecast. If this group does not use superannuation in this way, they will be leveraged at a very late stage in their lives.



∴Either the government will have to make direct cuts to pensions or it will have to trim access further. The stalling of indexation of payments may not be enough to deal with these looming changes.


Accessed by http://www.theaustralian.com.au/business/wealth/super-staring-at-a-ticking-housing-time-bomb-the-mortgaged-retiree/news-story/1e5c621b5b512169289b3e73c21136b9 on Mar/24/2017

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