New Study Shows Retirement Easier for Homeowners
After a lifetime of hard work and paying our dues, we all hope for a day when we can retire in peace – going on vacation with friends and family, having Sunday dinner with the kids and grandkids, and taking time to smell the roses and enjoy what we’ve worked our entire lives to achieve.
But a great retirement isn’t automatic. Retirement must be accounted for and planned towards – you need savings, a plan and very likely, a form of passive income such as investment returns. That’s why young adults are encouraged to apply for superannuation as soon as they enter the workforce.
And according to recently released numbers from the Association of Superannuation Funds of Australia (ASFA), owning a home is a vital step towards a great retirement as well.
Retiring as a homeowner
The ASFA defines a healthy retirement as being able to afford a decent car and clothing, insurance and household goods – while also having the financial leeway to be involved in a range of leisurely hobbies.
But according to ASFA’s numbers, non-homeowners will require over $1,000,000 of savings in order to enjoy even a modest retirement. By comparison, homeowners with paid off mortgages only need 64% of that ($640,000).
The cost of living has increased in recent years, and may increase even further as time goes on. Regardless of the cost of living, however, homeowners can always expect to have an easier time securing healthy retirement. This is due, almost entirely, to the costs of renting property being so high.
In arriving at these figures, the ASFA compared homeowners to what can be described as a “typical case” renter – a comfortably living couple in a two-bedroom unit costing $25,000 per year in rent.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If you’re thinking of buying a home, you can contact us for advice about the best options for you when it comes to your mortgage. The cost of your mortgage can drastically affect your financial planning, so it pays to speak to the experts about it.