Debt fears ‘haunt’ boomers
A survey by financial institution RaboDirect reveals almost a third of the baby boomer generation will still have a mortgage to service when they retire. A RaboDirect spokesperson said: “Baby boomers are feeling the pinch and are the most pessimistic of all the generations about the economic outlook of the nation.”
A survey by financial institution RaboDirect reveals almost a third of the baby boomer generation will still have a mortgage to service when they retire.
A RaboDirect spokesperson said: “Baby boomers are feeling the pinch and are the most pessimistic of all the generations about the economic outlook of the nation.”
RaboDirect’s, Renee Amor, claimed about 62% of this generation expected the economy to worsen during the next year, while almost half already reported having less money to live on each week.
The RaboDirect survey also found the average baby boomer had about $200,000 in their superannuation fund but that they expected to retire with $400,000. This was still about half’ the amount those surveyed thought was enough.
To cope with the “mortgage hangover” in retirement, many would either use their superannuation lump sum or sell their home outright to pay debt.
According to Ms Amor, about 40% of those who will still have a mortgage when they retire said they planned to sell their property, pay off the mortgage and hopefully buy a cheaper home.
Another 30% said they expected to use a superannuation lump sum to get rid of their mortgage.
Social analyst, David Chalke, from Strategy Planning Group said the baby boomers had “always been unprepared”.
“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,” Mr Chalke said.
“They’ve always had jobs, free schools and university although the bulk of the boomers left school at 16 and started work. They have only just realised things are thin.”
