A paid-off home has long underpinned retirement security in Australia, but new research suggests that foundation is cracking for younger generations.
Vanguard's 2026 How Australia Retires report, based on a survey of more than 1,800 Australian adults, found that while seven in 10 Baby Boomers own their home outright, almost half of Gen Z (48%) and more than one in three Millennials (37%) expect to still be carrying a mortgage into retirement.
Of those expecting to retire with home loan debt, 45% plan to keep making repayments throughout retirement, while 39% expect to clear the debt in one hit using their superannuation.
Vanguard's Daniel Shrimski (pictured), the firm's managing director for Asia Pacific, said the shift reflects broader economic pressure.
"Higher housing costs, bigger debts, and cost-of-living pressures are changing what retirement looks like, and what it will take to fund it," Shrimski said.
He noted the flow-on effect for super balances.
"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," Shrimski said.
For brokers, this changes the retirement income calculation for clients whose loan terms stretch into their sixties or seventies. The same report found retirement confidence is highest among outright owners, lower among those with a mortgage, and lowest among renters.
The disconnect extends to retirement income expectations more broadly.
Australians under 45 estimate they will need more than $90,000 a year in retirement, compared with roughly $60,000 reported by those aged 65 and over — a gap Shrimski linked partly to the same affordability pressures.
Beyond income expectations, Shrimski also pointed to a planning gap that brokers are well placed to help close.
"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," he said.
For brokers working with first-home buyers and property investors alike, the findings point to a widening need to discuss not just borrowing capacity and mortgage rates today, but how loan structure and extra repayments could affect a client's financial position decades from now.
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