How to manage debt to prepare for retirement

Sorting out debt is a great way to take control of your future. While retirement may seem distant, managing your debt could help you reach it sooner. And you’re not alone. There are different options to explore and AustralianSuper can help you access advice1 to make a plan that’s right for you. Whatever your path to retirement, we’re with you.

How to tackle debt

Managing debt starts with making it a priority. While you’re still working, it can help to focus on paying off your debts as a way to prepare for your retirement. Even small changes can make a big difference.

Budget wisely

Create a detailed budget of all your income and expenses. Look for areas where you could free up extra funds to pay off some debt – is there anything you could give up for a little while? Be realistic about what you can commit to.

Assess and prioritise your debts

Get a full picture of what you owe. Make a list of all your debts and put them in order from highest to lowest interest rates. Paying off the high-interest ones first can reduce the total amount you’ll pay over time.

Consider consolidating debt and refinancing

If you have multiple debts, explore refinancing options or whether you could combine them into a single loan with a lower interest rate. This may help lower your repayment amounts and save you money.

Revisit and reassess

Financial circumstances can change rapidly. Staying on top of your budget and debt goals can help you quickly make any adjustments you need to stay in control.

Check for potential super savings

Simple actions could help make more of your super. If you have more than one super account, consolidating your super2 into one account could save you from paying multiple sets of fees. Or you might have lost super that you could claim to boost your super savings.

Explore other resources

For more practical tips and tools to help you work towards a debt-free future, visit the Money Smart website.
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The importance of paying off debts before retirement

You might be planning to wait until you retire to pay off your debt when you access your super but paying it off sooner could save you a lot in interest payments. You also need to think about how you plan to fund your retirement. Using super to pay off debt can reduce your retirement income, and you might miss out on future investment returns.

‘Ideally, we don't want to use our super to pay off debt…Generally, it's always a good idea to start hacking away at those debts, and that's especially because of the power of compounding interest on that loan.’3

– Fern Havea, Financial Planner, AustralianSuper

Getting the right advice for you

The journey to retirement is unique for everyone, especially when debt is involved. AustralianSuper is here to support you with tools, webinars and access to advice options to help you prepare for retirement - and manage debt.

Simple advice

As an AustralianSuper member, you can get general advice about your super account over the phone4, such as making an investment choice and understanding your retirement income options. There is no additional cost, as it’s covered in your admin fees.

Get in touch

Comprehensive advice

You can meet with a financial adviser for more comprehensive advice5, like creating a tailored debt repayment plan. Your first meeting is free. If you decide to proceed, all fees are agreed upfront. If the advice only relates to your super, you can pay for it from your AustralianSuper account.

Find an adviser
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