The Retirement Mirage: Why Australia’s Wealthiest Generation May Be the Most Financially Fragile
19 Nov 2025
Our earlier analysis showed why younger families struggle to match the milestones their parents set. The retirement story is the other side of that coin. Many older Australians aren’t sitting comfortably on untouchable wealth; they’re trying to retire inside a system built for an economy that no longer exists
For years, the dominant story about Baby Boomers has been simple: the luckiest generation in Australian history. Born into the long boom, bought houses when prices were sane, worked stable jobs, retired with healthy assets. On paper, it all seems true. Household wealth data consistently shows that Australians over 60 hold a substantial portion of the nation’s property and superannuation assets.
But a closer look at the numbers tells a more complex story — and a far more fragile one. Behind the headline wealth lies a retirement system held together by assumptions that don’t behave the way they used to. Many older Australians are asset-rich but cash-poor, carrying mortgage debt late in life, holding undersized super balances and facing aged care costs that can liquidate entire estates. And for a meaningful portion of Boomers, the “wealthy retiree” stereotype never applied at all.
It’s tempting for younger Australians — especially in high-pressure suburbs like Miranda, Engadine, and the broader Sutherland Shire — to view the older generation as the ones who “pulled up the ladder.” But the truth is more uneven. Some Boomers climbed the housing ladder early because the rungs were closer together. Others spent their entire working lives trying to reach the first rung and still didn’t.
Australia’s intergenerational tension is built on a misunderstanding. Younger families are struggling to build wealth in a system designed for a different era. Older Australians are trying to retire in a system built on assumptions that no longer hold. Both generations are wrestling with versions of economic fragility — they just experience different symptoms.
The Illusion of Wealth When It’s Locked in the Walls
If you looked only at median net-worth statistics, you’d assume older Australians are thriving. ABS household wealth data shows Australians aged 65+ hold the highest median wealth of any age group, often above $1 million per household. But more than 60–70 per cent of that wealth, for many retirees, is tied up in the family home.
The house looks impressive on a balance sheet — a $1.5 million property in Caringbah South or a $1.2 million villa in Miranda gives the appearance of security. But a home doesn’t pay energy bills. It doesn’t fund aged care. It doesn’t help with food, insurance, transport or rising medical costs. It doesn’t generate cashflow unless it’s sold — and selling can create a new set of financial risks.
When researchers drill into retirees’ bank accounts rather than their asset values, a different picture emerges. A not-insignificant cohort of homeowners live on the age pension as their main income source. After utilities, rates, insurance and basic living costs, some retirees report as little as $80–$120 a week in discretionary funds. In regions with high council rates or strata levies, that number can be even lower.
Australia has created a generation that looks prosperous from the outside but lives with a narrow margin for error.
Superannuation Wasn’t Built for Their Timeline
Another myth is that Boomers retire with overflowing super accounts. In reality, compulsory superannuation began only in 1992. Early Boomers spent two-thirds of their working life under a system where employer contributions were 3–4 per cent — if employers paid them at all.
Treasury modelling consistently shows that many current retirees entered retirement with:
less than $200,000 in super, and
a significant portion with less than $100,000.
These balances were never designed to fund 25–30 years of retirement, let alone the extended life expectancies Australia now sees. Older Australians aren’t failing to budget — they’re operating within the limits of a system that matured too late to benefit them fully.
Younger Australians, contributing 11 per cent from day one, will retire with far more super — assuming market performance and wage growth remain supportive. But for today’s retirees, superannuation functions more like a supplementary savings account than a full retirement pillar.
The Rise of Mortgage Debt in What Should Be the Debt-Free Years
Previous generations retired almost universally without mortgage debt. That’s no longer true. RBA and APRA research shows a sharp rise in Australians aged 55–74 carrying mortgage balances into retirement. Some still owe several hundred thousand dollars; others refinance late in life to help their adult children with deposits, inadvertently importing their kids’ housing stress into their own retirement.
This trend matters because the pension was designed for debt-free retirees. It was never intended to cover mortgage repayments. When repayments of $1,000–$2,000 a month collide with a full or part pension, the financial stress becomes immediate and unavoidable.
The cycle that once supported upward mobility — parents helping children — is now sometimes reversing: parents refinancing for children, and later children supporting parents through unexpected retirement shortfalls.
This is not a sign of generational selfishness. It’s a symptom of a housing market that broke its traditional intergenerational handoff.
Aged Care Costs: The Retirement Expense Nobody Plans For
Even financially comfortable retirees can be pushed into fragility by aged care. The costs are not widely understood:
Refundable accommodation deposits (RADs) often exceed $550,000–$750,000.
Daily care fees can reach $60–$90 per day, or around $22,000–$33,000 per year.
Additional service fees (cleaning, physiotherapy, meals, activities) can escalate the cost further.
Home-care packages — the preferred option for most — involve long wait times and rising out-of-pocket contributions.
These costs frequently force families to sell the family home, even when the intention was to keep it within the estate. For retirees who are “asset rich, income poor,” aged care becomes the moment when their apparent wealth evaporates.
And this is where the generational dynamic becomes more complicated. Children may assume their parents are wealthy because the house has appreciated. But when aged care consumes most of that value, there is often little left to pass on.
The “great wealth transfer” Australians talk about is real — but heavily conditional.
Downsizing: The Solution That Rarely Works the Way It’s Promised
Politicians frequently encourage downsizing as the answer to retirement insecurity. Sell the big home, buy something smaller, live off the difference. In practice, it’s far more complex.
Transaction costs alone can consume a large chunk of the proceeds:
stamp duty
agent fees
legal and conveyancing fees
moving costs
strata levies on the new property
On a $1.2 million home in Miranda, the combined cost of selling and buying can easily reach $70,000–$90,000.
Then there’s the availability issue. Many retirees want to downsize in their own suburb to remain near family networks, GPs and social circles. But many middle-income suburbs — Miranda, Cronulla, Caringbah — lack affordable, appropriately sized retirement-friendly properties.
Finally, there’s the pension trap. Proceeds from selling the family home can reduce pension eligibility, meaning the downsizer becomes less financially secure, not more.
Downsizing works beautifully in theory. In reality, it often gives retirees a smaller home and a weaker income position.
Not All Boomers Own Properties — and Those Who Don’t Are Highly Vulnerable
One of the most overlooked truths is that a significant minority of Boomers never owned substantial property. Rising rents, divorce, job loss, illness and long-term caregiving roles pushed many out of the housing market decades before retirement. The result is a growing cohort entering retirement as long-term renters.
Renting in retirement is one of the strongest predictors of late-life poverty. Private rental markets are volatile, especially in urban areas. A rent increase of $30–$60 a week — common in Sydney — wipes out the entire discretionary budget of a pensioner.
The fastest-growing homeless demographic in Australia remains women over 55, many of whom are former carers, former part-time workers, or individuals with interrupted work histories and low super balances. These people are not living the “Boomer luxury” stereotype. They missed the bus entirely — and now navigate retirement without the safety net of home ownership.
This is the part of the intergenerational conversation that rarely surfaces. Not all Boomers pulled the ladder up. Some never climbed high enough to reach it.
Inheritance Timing: The Wealth That Arrives Too Late
Younger Australians often assume Boomers will pass down wealth they’re currently “hoarding.” But increased longevity and aged care costs mean inheritances now often arrive when the children are in their 50s or 60s — long after the window where a deposit or school fees would have mattered.
A significant portion of estates is consumed by:
aged care fees
medical expenses
late-life mortgage debt
the cost of maintaining ageing properties
The idea that younger generations will be saved by large inheritances simply doesn’t align with demographic reality. Much of the wealth Boomers hold on paper is already spoken for by the economics of ageing.
Australia’s Retirement System Was Built on Assumptions That No Longer Hold
The most important structural point is this: Australia’s retirement system was designed with three implicit assumptions.
Asset prices would rise indefinitely.
Housing would keep appreciating faster than inflation. Super balances would grow at a steady rate. Property equity would always outpace costs.Most retirees would own their home outright.
This kept pension costs manageable and reduced private rental stress.Super contributions would be high enough for full self-funding.
This only became true for younger generations — not for today’s retirees.
When these assumptions weaken, the retirement landscape wobbles.
If housing flattens, if super returns underperform, if interest rates stay high, if aged care costs outpace income growth, or if the pension becomes stretched by an ageing population, retirees face risks the system wasn’t built to absorb.
This is where the fragility lies. Not in the headline wealth figures, but in the fragility of a system that performs poorly when asset inflation slows.
The Generational Blame Is Misplaced
Younger Australians face a harsher landscape than their parents did — tougher housing ratios, slower wage growth, larger family costs, higher consumer prices and more insecure work. But older Australians face a different kind of vulnerability: retirement systems that matured too late, healthcare and aged care costs that didn’t exist in their parents’ era, and assets that don’t generate income unless sold.
The “Boomer vs Millennial” narrative makes for cheap political theatre, but it hides the truth that both generations are navigating systems that no longer work the way they were designed to.
Older Australians aren’t universally wealthy. Younger Australians aren’t universally irresponsible. Both are grappling with versions of economic pressure their parents and grandparents never had to contemplate.
Planning in an Economy That Doesn’t Behave the Way It Used To
For retirees and pre-retirees, the challenge is no longer simply budgeting or saving — it’s understanding the structural forces shaping retirement costs. For younger families, the challenge is navigating systems with new risks and new timelines.
Financial fragility today doesn’t come from one mistake. It comes from a mismatch between assumptions and reality.
The more we recognise that, the more realistic and effective our planning becomes — both for those starting their financial journey and for those trying to secure the final decades of theirs.
If you’re navigating retirement uncertainty — or planning to avoid it — we can help.
Trident Accounting works with families and retirees across Southern Sydney to build plans that make sense in today’s economic reality, not yesterday’s assumptions. Whether it’s structuring your retirement income, managing tax impacts, preparing for aged care or simply understanding your long-term position, we’re here to help.
Written by Aidan Walmsley