Do you subscribe to the philosophy that although you have debt on your house approaching retirement, that everything will work out when you sell your house as you can clear the slate and buy a smaller residence and live on your super? Some flaws in this plan are 1. The funds from your house usually only marginally cover your new property, taking into account selling and purchasing costs; and 2. Quite often you can’t sell as early as you would like, due to the children enjoying the economic freedom of living at home, or grandparent duties necessitating extra bedrooms.
In the past 15 years, for property owners over 65, carrying debt has trebled to approximately 14%. These figures, however, also include owners with investment properties. Firstly, my advice would be to refrain from the temptation of utilising your superannuation to pay down mortgage debt; and set up an appropriate budget and plan to pay off your home by the time you retire. I accept that this is not easy, as every time you make progress, unexpected expenses constantly appear from nowhere. For those in their younger years who feel they need not worry about planning until later in life, think again! Decades pass by in a flash. My thoughts have always been to purchase an investment property you can afford to buy now, rather than wait and save.
History shows that quality, well located property, doubles every 8-10 years. Whilst negative gearing still exists, this has to be one of the soundest initiatives to plan for retirement. So pay down your capital gains free asset then buy again, providing affordability allows for it. Most importantly, always consult financial advice before committing to a major purchase.