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How to Deal With the Stress of Mortgage Debt in Retirement

Everyone wants to have a comfortable retirement. However, several factors can affect your retirement lifestyle. One of these factors is mortgage debt.

With the RBA announcing a 0.25% increase in interest rates for the first time since November 2010, with speculation that this is not a one-off, many households are left questioning how they will handle increased mortgage repayments in conjunction with the increased cost of living pressures. According to a study in August 2019 by the Australian Housing and Urban Research Institute (AHURI), around 50% of homeowners aged 55 to 64 are still paying off their mortgage debt, and this can seriously impact one’s mental health.

With debt still being an issue in retirement, older individuals can get very stressed about the financial security of their future, especially since they will no longer be working. This debt stress can often lead to anxiety and depression. To help manage mortgage debt and stress, here are some helpful tips you can follow:

Understand That Everyone’s Situation Is Different

For the sake of your mental health, it is essential not to compare your financial situation with someone else’s. Remember, everyone’s situation is different. So, what may work for someone else may not be the best course of action for you; and comparing two very different scenarios will only add to the stress you feel when it comes to your mortgage debt,

So, your actions regarding your mortgage debt should be based on your specific circumstance rather than what others are doing. For example, you may be wondering whether it’s better to pay off your mortgage instead of focusing on your super and retirement. There’s really no definitive answer for this.

Some may find that paying off their mortgage is what’s best; however, for your situation, it may not be ideal. Perhaps you have other debts to consider. Or maybe your superannuation isn’t the only investment you have. These are all factors that will define your decision. General advice on what to do should only be taken with a grain of salt.

Avoid Making Rash Decisions

When it comes to any financial decision, it’s never a good idea to rush things. This is also true for your mortgage debt payments. When you’re under a lot of stress from your mortgage debt, it is easy to fall into the trap of rash decisions. The stress of the debt and the need to pay it off, often leaves people feeling panicked, and they may end up making rash decisions that they will later on regret.

For example, some retirees may decide to sell their homes to reduce their mortgage costs. While this seems reasonable, it can affect your Age Pension retirement (depending on what you do with the remaining sale proceeds).

When making decisions regarding your mortgage debt, it is important to look at the whole picture. You have to consider how your decisions will affect your retirement and not just focus on paying off your debt.

Get Professional Financial Advice

As we’ve previously mentioned before, everyone’s situation is different. So, it would be better to seek professional financial advice for your specific situation rather than follow generic advice.

By speaking to a professional financial adviser, you can go over your specific situation and find the appropriate solution for your debt that also leaves you feeling confident about your future. Seeking financial advice can also help you ease mortgage debt stress, as it can be overwhelming to handle on your own. A financial adviser can go through the different options you have and help you achieve your financial goals.

Managing Your Mortgage With Confidence

Dealing with mortgage debt can be extremely stressful, especially when you’re still paying off debt in retirement. But with the appropriate financial advice, you can find the right solutions for your problem and avoid making rash decisions. This way, you can live a more comfortable retirement life.

Secure your future with the help of Newcastle Financial Planning Group. We are a expert financial advisers in Newcastle who helps our clients to make smart, informed financial decisions that will give you peace of mind knowing you have the financial means to live your best life.

Our experienced team takes pride in working with clients to ensure they are retirement-ready, so they can focus on enjoying the wealth they have accumulated and the lifestyle they desire. Book a complimentary meeting now!


DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Coastal Advice Port Macquarie and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
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