Baby boomers can’t afford to retire

Baby boomers are often touted as one of Australia’s most prosperous generations.

They are living longer than previous generations, retiring later, and are commonly labelled as the beneficiaries of Australia’s growing property market.

But according to research conducted a couple of years ago,  a third of Australian baby boomers won’t be able to afford their retirement.

The Baby Boomer Housing and Lifestyle Report – examining the affordability concerns, retirement plans and housing and lifestyle preferences of over 2,500 baby boomers nationally – reveals the majority of baby boomers do not believe they are well off and are concerned over the impact of current house prices. 54935520 - baby boomer: yellow road sign with a blue sky and white clouds

  • 37.8% believe they won’t have enough money to fund their retirement
  • Around a third of baby boomers are uncomfortable with current house prices
  • 15.5% feel they are being priced out of the market by other buyers
  • 8.9% of baby boomers nationally are stuck on the rental roundabout without any intent to buy
  • Of those who are downsizing, 16.2% are doing so because they can’t afford to live in their current property in retirement
  • Of those who anticipate having to move to another area/state/country, nearly a third are doing so to be in a more affordable area

‘Encore’ years short changed

The report also shows baby boomers’ hopes for the lifestyle they wish to lead in retirement are being tempered by concerns of making ends meet.

More than half of baby boomers said they would need over $46,000 per annum to live comfortably in retirement – higher than the estimated $42,200 experts say is required. 

Being able to take holidays in retirement was ranked as most important by baby boomers, followed by health/fitness (e.g. club memberships), social outings/entertainment, dining out and shopping.

But only 35% will be using Superannuation to fund retirement.

A further 22.2% will be reliant on Government pension, 6.1% anticipate they will remain in casual or part time work to support themselves, and just 12.1% will be able self-fund/rely on savings.

It goes to show that baby boomers, like young buyers, are struggling to navigate a range of new affordability pressures including rising house prices, plans to lift the pension age to 70, a high jobless rate, future changes to indexation of the age pension, and the need to support themselves for decades to come.

So what are the solutions for baby boomers already on the doorstep to retirement?

The report suggests much of the answer lies in policy.

Recently there’s been talk of a ‘last home buyers grant’ to assist older buyers to secure a property, particularly in a market where downsizing is often no longer conducive with a lower price tag.

Stamp duty concessions for older Australians would also assist with housing affordability.

Rethinking the proposed pension age increase is another solution.

If baby boomers are expected to work until they’re 70 and not access their Superannuation until this time, older workers are going to require support to find suitable jobs, particularly part-time employment, which isn’t available currently.

Reconsidering Superannuation rules to introduce a higher contribution for people over a certain would also boost retirement savings faster for soon-to-be retirees.

My thoughts:

The solutions proposed above all rely on the government looking after us. Home Finances

Call me skeptical – but I don’t think that’s the answer!

It’s never too late (well..almost never) to become financially fluent and take your financial future into your own hands.

I know many baby boomers who are using the equity in their homes to buy investment properties while others are setting up Self Managed Super Funds to buy property.

If you’re planning to go down this route please get independent qualified specialist advice.

Of course baby boomers have shorter investment time frames so proper property selection is critical   – especially at this stage of the real estate cycle .

If you’re looking for some independent, unbiased advice on what type of properties to buy, why not have a chat with one of the strategists at Metropole – just click here and organise an obligation free strategy session.

Also published on Medium.

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit

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