New data shows housing costs and debt are reshaping retirement expectations across generations
A growing number of younger Australians anticipate carrying mortgage debt into retirement, according to new research from Vanguard, with significant implications for how they will fund their post-work lives.
The findings come from Vanguard's How Australia Retires report, which surveyed more than 1,800 Australian adults on a nationally representative basis. The data shows a sharp generational divide in home ownership at retirement: 71% of Baby Boomers own their home outright, compared with 48% of Gen Z respondents and 37% of Millennials who expect to still have a mortgage when they retire.
Self-assessed likelihood of retiring with a mortgage
Source: Vanguard, How Australia Retires report, 2025
"Higher housing costs, bigger debts and cost-of-living pressures are changing what retirement looks like, and what it will take to fund it," said Daniel Shrimski, managing director, Asia Pacific at Vanguard.
The report found a strong correlation between housing status and retirement confidence. Those who owned their home outright recorded the highest confidence levels, while those carrying a mortgage reported lower confidence, and renters lower still.
Among respondents who expect to retire with a mortgage, 45% plan to continue making regular repayments in retirement. A further 39% intend to draw on their superannuation to clear the debt in a single transaction.
How Australians intend on managing their mortgages in retirement
Source: Vanguard, How Australia Retires report, 2025
The potential drain on superannuation balances is a key concern raised in the report. "Younger Australians may accumulate larger super balances than previous generations, thanks to higher contribution rates and more years in the system," Shrimski (pictured right) said.
"But if a greater share of those savings is needed to pay down housing debt or cover ongoing housing costs, the boost to retirement income may be smaller than many people expect. It also raises an important question: how will Australians fund the dignified retirement they've worked hard for if a significant portion of their super is needed to pay off their home?"
The research also highlights a shift in expected retirement income needs. Australians under 45 estimated they would require more than $90,000 per year in retirement, compared with approximately $60,000 reported by those aged 65 and over.
Despite the heightened stakes, many working-age Australians are yet to put a retirement plan together. "Nearly half of working-age Australians have no retirement plan, yet our research shows those who have started planning are significantly more confident about their future," Shrimski said.
In response to the findings, Vanguard is launching its Super September Challenge, which outlines five steps associated with stronger retirement confidence: building a retirement plan; learning about superannuation and the Age Pension; improving financial literacy; considering additional super contributions where appropriate; and reviewing super balances and investment options regularly.
"Our research shows that small actions taken consistently over time can build confidence and help Australians prepare for the retirement they want," Shrimski said. "The earlier people engage with retirement planning and their superannuation, the more choices and options they are likely to have in the future."
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