Australians are carrying higher levels of debt into retirement than the previous generation.
Saving money to fund a comfortable retirement continues to be more difficult for the current generation of older Australians. A recent survey of more than 1000 Australians undertaken by finder.com.au, reveals that older Australians are carrying higher levels of debt into retirement than their parents did at the same time of their life, with adult children staying at home longer being a major contributing factor.
More than 37 per cent of older Australians told the survey that they are carrying significant debt. Michelle Hutchison from finder.com.au said these findings suggest that many Australians are under a misguided impression that they will be debt-free by the time they retire, but, currently, they may not be spending their money sensibly enough to ensure this will happen. The reality is that many Australians will never be debt-free in retirement, or ever for that matter, and that older people should also expect this outcome.
As a result of this study, Ms Hutchison believes that Australians need to be more conscious about repaying debt before they reach retirement.
Read more at The Age.
With interest rates hitting record lows this year at two per cent, compared with 17.5 per cent in January 1990, you would expect it to be less difficult for Australians to repay their debts. But the reality is significantly different to this expectation, with credit card companies slugging customers between 17 to 21 per cent interest per annum on debt, and an increasing number of Australians falling over themselves to accept enticing credit card offers instead.
What ever happened to the days when you either had to save up the money to buy an item or you simply went without? While there is a growing concern for the increase of older Australians entering retirement with debt, the greater fear must be for future generations who also seem to be even more inclined to spend money they don’t have.
With 53 per cent of Australians currently living in debt and one in 10 believing they will never be debt free, the ability to borrow high amounts of money at the interest rates offered should be questioned, especially for older Australians who are transitioning from a full-time wage to no wage in the next 15 years.
What do you think? Are Australians addicted to credit cards? Should there be as stringent measures in place for credit cards as there are for traditional lower interest rate loans? Should the system protect the consumer from falling too deep into debt? How does this affect you?
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