Retirement is something we all dream about and aspire towards, but is it in our grasp?

We work hard all our lives to provide for our families, hopefully saving along the way and investing wisely to set ourselves up for a financially secure future beyond our working years.

For the lucky ones, that might mean ceasing work in our late 60’s. However, for the vast majority of Australians, that remains but an elusive pipe dream.

According to research conducted by the University of Melbourne and Towers Watson, a large number of Australians are unlikely to achieve adequate retirement incomes, even when all sources of savings are considered (including superannuation holdings, age pension entitlements, and other household assets such as financial assets and property).

The study found that only 53% of couples and 22% of singles were on track to achieve a comfortable level of retirement income.

Mortgages and debts are among the main reasons Australians are unable to save adequately for their retirements. 

Whilst the baby boomers had the benefit of receiving free university education and affordable housing, our current and future generations haven’t been quite so lucky. 

Now that is not to say that our parents and grandparents that came before us didn’t work hard to create the lives that they did, and that many of us are reaping the rewards of the hard yards they put in, but rather acknowledging that certain opportunities and circumstances have changed over the years. 

In other words, we are increasingly carrying larger levels of debt in the later stages of our lives.

If we look at housing for instance, latest data collected by The Australian Housing and Urban Research Institute (AHURI) has suggested that more Australians, now then ever before, are expected to have a mortgage later on in life, with the average age of first home buyers increasing over the years.

Whilst in 2000-01 just over 60% of Australians bought their first home when they were aged between 25 and 34 years old, that number has decreased to under 50% in 2013-14.

And in the higher age cohort, between the ages of 35 to 44, the number of Australians buying their first home had increased from 18.9% in 2000-01 to 26.2% in 2013-14 – hence, more Aussies are buying their first home at later stages of their life.

In fact, the AHURI report revealed that 8.2% of households aged 65 and over were still paying off their mortgage in 2013-14, more than double the rate of 3.6% in 2000-01.

This means that more Aussies are heading towards retirement with a mortgage over their head, something not seen in prior generations.

What’s the root cause?

It’s hard to pinpoint just one factor, as the reality is that this complex issue is made up of many different facets.

However, one obvious and key contributor is affordability. With property prices continuing to grow, many Aussies simply can’t afford to purchase their first home and are often priced out of the market by investors or older aged buyers.

The result is, as data would suggest, delayed first home purchases as younger would-be buyers instead choose to stay at home rather than moving out or renting rather than buying.

As we saw just before, almost 4/10 first home buyers are now aged over 35.

Careful planning and consideration is the way forward.

There is no quick-fix solution to the growing retirement problem facing our nation. However, that’s not to say it’s all doom and gloom.

The answer is an holistic, well thought-out and strategic approach to ones financial future and wellbeing. It involves looking at all aspects of one life to better prepare for the future years to come, creating a roadmap and plan to get you there.

It requires setting goals and objectives, outlining where you want to be and how you’re going to get there, all the while planning and providing for unexpected events that may hinder or impact that endeavour.

In other words, it requires careful planning and significant consideration – as after all, ‘if you fail to plan, you plan to fail.’

We have seen these concerns prop up time and time again with our investors and clients, which led us to create our unique property investment philosophy and methodology – the InvestorLifecycle™ model – which addresses these issues in detail.

Our InvestorLifecycle™ model is designed to help investors understand how to create ideal property investment strategies around major life events, to increase household cashflow, pay less tax, and structure investments safely and securely through each stage of their life so they can better prepare themselves as they head towards retirement – a time in our lives we should all be able to look forward to.

If you’re interested in learning more about how InvestorLifecycle™ can help you better plan for different life events, you can download your free introductory guide here.


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