Australia is going through monumental changes to the retirement landscape, especially where issues of housing security and financial preparedness are concerned. Recent data reveals that the proportion of retirees who own their homes outright has declined from 75% in 2003 to 66% in 2023. The percentage of retirees that still have a mortgage has risen from 13% to 17%. Simultaneously, the share of retirees that live in rentals has more than doubled, from 6% to 12%. These numbers paint the picture of a crisis that will threaten the well-being and prosperity of generations to come.
The average retirement age has seen a dramatic surge, jumping up five years between 2003 and 2023. Women today retire at an average age of 63.6, an increase of 4.8 years from 58.8. At the same time, men’s typical retirement age has increased from 59.9 to 64.8. This movement is in line with a nationwide trend of older Americans working longer before making the jump to retirement.
This comes after Australians have taken remarkable steps in financial preparedness. Those in their late 60s saw their average superannuation balances jump from $245,122 in 2015 to $383,217 in 2023. Men’s super balance went up from $467,307 to $504,420. In stark contrast, women have enjoyed a phenomenal boost of more than 100% in their median super balance since 2015. On the one hand, this is good news, pointing to an overall improvement in the state of single women’s savings.
Kyle Peyton has found that housing wealth especially affects the odds of being financially secure in retirement. This last point is particularly vital, even given the planned increases in superannuation. He claims that housing is still the largest element of economic prosperity of the Australian retiree.
“For the majority of retirees, housing wealth — the largest contributor to household wealth in Australia — serves as a key financial safety net.” – Kyle Peyton
Peyton refers to today’s retirement system based on the idea that people will have their own homes by the time they retire. The drop in outright homeownership presents a significant challenge to many older adults.
“That’s a pretty significant shift, because the retirement system in Australia is built on the assumption that people will own a home when they enter retirement,” Peyton said.
The rapidly growing population of retirees with high rental burdens could find it impossible to live a comfortable life in retirement. Without the benefits of homeownership, as rent prices skyrocket around the country, many will struggle to maintain a retirement superannuation balance.
“You’re going to have to burn through a lot more of your super just to keep a roof over your head if you don’t have that home, because rent’s really expensive in Australia,” Peyton noted.
In recent years the share of retirees exiting the labor force involuntarily for health reasons has markedly decreased. It plummeted from 39% in 2003 to a miserable 29% in 2023. This move may be part of an overall cultural change in the U.S. toward work-life balance and retirement savings.
Peyton makes the case that these trends highlight a glaring inequity for generations to come. He argues for frank conversations about intergenerational inequality and the critical role housing policy plays in determining the experience of retirement.
“This is a big problem for future generations, and I think we need to get serious in this country about addressing intergenerational inequality and housing is really where it’s at.” – Kyle Peyton
