Australians are being pushed to reassess how retirement is funded, with growing pressure on the superannuation system to account for the role of housing wealth as balances alone prove insufficient for many retirees.
The call comes as more Australians enter retirement with mortgage debt and face longer retirement horizons, exposing gaps in a system still largely framed around super accumulation and drawdown.
Homesafe Wealth Release CEO, Dianne Shepherd, said retirement planning has become overly concentrated on superannuation, limiting how effectively Australians assess their financial position.
“Retirement planning in this country has become narrowly focused on what sits in a super fund or an investment account,” Shepherd said. “But retirement capital is the entire balance sheet a household has built over a lifetime and for most Australians, the largest line on that balance sheet is the family home.”
Pressure on super balances is intensifying as cost-of-living challenges and uneven contribution histories leave many retirees reliant on limited income streams, despite holding significant wealth in housing.
“Too often, retirement planning focuses on what happens outside the front door,” Shepherd said. “Superannuation balances, investment portfolios and income streams are examined closely, while the home is treated as something separate or untouchable. The result is a generation of Australians who are asset-rich but cash-constrained with their retirement income options assessed as though their largest asset does not exist.”
The critique highlights a structural issue within the retirement system, where superannuation is often treated as a complete solution rather than one component of broader household wealth.
“Super is a vital part of the system, but it is only one part,” Shepherd said. “Discussions about retirement readiness rarely consider the home, even though it often represents more wealth than everything else combined.”
With retirement now commonly spanning 25 to 30 years, the adequacy of super balances is increasingly under scrutiny, particularly as policymakers and funds grapple with how to improve retirement outcomes without materially increasing contributions.
Shepherd said reframing retirement planning to include the home would not diminish the role of super, but instead provide a more realistic foundation for decision-making.
“A balance sheet approach does not prescribe a single pathway,” Shepherd said. “It does not suggest every homeowner should access the equity in their property, nor does it diminish the role of strategies such as downsizing or drawing on superannuation. It simply broadens the lens through which retirement decisions are made.”
The debate also intersects with how super funds design retirement income products, with growing recognition that members’ financial positions extend beyond their account balances.
“There is a long-held view that the home must be preserved at all costs, typically to pass on as inheritance. That remains important for many families,” Shepherd said. “But the home can also support financial security, lifestyle and independence during retirement itself. These decisions are not mutually exclusive and they are more balanced when households understand their full position.”
Homesafe is calling on policymakers, super funds and advisers to evolve the system beyond its traditional accumulation-and-drawdown framing, arguing that a more integrated approach is needed to reflect how Australians actually hold wealth.
“Australia’s retirement system continues to evolve, but public understanding has not fully kept pace,” Shepherd said. “The next step is for the industry to catch up with how households actually hold their wealth and to help Australians plan with their whole balance sheet in view, not just the part that sits in a super fund.”
