Far from being the reckless hedonists that the older generations want to paint us as, it turns out that millennials actually take saving money and their superannuation very seriously.
If you fall into that category, this should come as no shock to you. It’s not like the world has given us much choice except to be super savvy with our savings and make every cent count.
The data support this idea too. Just in April of this year, a new US study found that Millennials are way ahead of the Baby Boomer generation when it comes to saving for retirement. According to investment firm Charles Schwab, The younger generation has more savings than the older generation did at the same age. What’s more, they started putting money away for retirement at least a decade ahead of the older crowd.
This is partially explained by economic factors like the inability to afford housing, but also the sense that there won’t be the same safety net available to younger people when they reach retirement age.
In Australia, the same appears to be true. New data from leading super fund Equip has revealed that the investment choices of millennials have shifted, with almost half (47%) of 18-34-year-olds seeing their superannuation as more important now than at the start of the pandemic.
Equip also found that almost half of the respondents to their survey have made voluntary super contributions. 39% of those made their first contribution before they hit the age of 30.
Equip CEO, Scott Cameron, has said that; “young Australians are thinking about their financial plans much more than they have previously.”
Again, this is likely because we have to. The same survey found that the pandemic was particularly rough for those under 35. One-third lost working hours during the pandemic, while 13% lost their jobs or were granted a leave of absence.
That being said, some did quite well out of the pandemic and the COVID relief granted by the government. 27% said that they have more disposable income now than they did in March 2020, and 35% of those people are millennials.
If you’ve yet to start thinking about your super, except for that annoying chunk that comes out of your paycheque each month, Cameron argues it’s never too early to begin putting money away for retirement. In fact, those who do make voluntary contributions are in for a range of financial benefits, not least of all the tax savings.
“The easiest way to make a start is to see how much you already have saved, and how much extra you can afford to commit to making additional contributions,” he said.
“Even allocating just a small percentage of savings each month towards your super now can bring you a step closer to a comfortable, and possibly even early, retirement.”
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