Superannuation targeted to clear mortgages by 39% of indebted retirees, Vanguard finds

Almost four in ten Australians who expect to retire with mortgage debt would consider using their superannuation to pay it out, according to research from Vanguard.

The investment manager's How Australia Retires 2026 report surveyed more than 1,800 Australians in February 2026.

It found 39% of those heading into retirement with a home loan would consider drawing on super to clear it.

Another 45% expect to keep making loan repayments after they stop work.

Mortgage debt in retirement is not limited to younger cohorts.

Almost one in four Baby Boomers, or 24%, expect to retire with a mortgage, alongside 23% of Gen X, 37% of Millennials and 48% of Gen Z.

The liability affects financial sentiment.

Among retirees carrying a mortgage, almost half report low retirement confidence, compared with one in five who own their homes outright.

Homesafe Solutions chief executive Dianne Shepherd said national retirement income settings assume people reach age 67 with their homes paid off.

Shepherd said standard benchmarks, including ASFA budgets and the Age Pension assets test, rely on outright home ownership.

Withdrawing a lump sum at 65 to clear housing debt swaps repayments for a permanently smaller income stream over the next 25 years, Shepherd said.

The Vanguard report also found 45% of working-age Australians have no retirement plan, while 62% could not correctly identify the age they can access superannuation.

Most Australians prefer not to relocate.

Around 60% expect to remain in their own home throughout retirement, and only about one in four retirees had sold or planned to sell.

Homesafe, which sponsored an October 2025 white paper on retiree debt, argued that super funds, advisers and policymakers should treat home equity as a funding option alongside super balances and the Age Pension.