Far from being the reckless hedonists that older generations want to paint us, it turns out that millennials actually take saving and their retirement pension very seriously.
If you belong to this category, this should not shock you. It’s not like the world has given us much choice except to be very savvy with our savings and make every penny count.
The data supports this idea too. Just in April this year, Millennials are way ahead of baby boomers when it comes to saving for retirement, a new US study has found. According to investment firm Charles Schwab, the younger generation has more savings than the older generation at the same age. Moreover, they began to save money for their retirement at least a decade before the older ones.
This is partly due to economic factors such as the inability to afford housing, but also the feeling that there will not be the same safety net available to young people when they reach the age of retirement.
In Australia, the same seems to be true. New data from leading super fund Equip has revealed that the investment choices of millennials have changed, with almost half (47%) of 18-34 year olds seeing their retirement as more important now than at the start of the pandemic.
Equip also found that almost half of their survey respondents made voluntary super contributions. 39% of them made their first contribution before reaching the age of 30.
Equip CEO Scott Cameron said so; “Young Australians are thinking about their financial plans a lot more than they used to.”
Again, it’s probably because we have to. The same survey revealed that the pandemic was particularly harsh for those under 35. A third lost working hours during the pandemic, while 13% lost their jobs or got furlough.
That being said, some have coped quite well with the pandemic and the COVID relief provided by the government. 27% said they have more disposable income now than in March 2020, and 35% of those people are millennials.
If you haven’t started thinking about your super yet, except for that annoying part that comes out of your paycheck every month, Cameron argues that it’s never too early to start putting some money in. money aside for retirement. In fact, those who make voluntary contributions enjoy a range of financial benefits, including all tax savings.
“The easiest way to start is to see how much you’ve already saved and how much you can afford to commit to making additional contributions,” he said.
“Even by allocating only a small percentage of savings each month to your super now, you can get closer to a comfortable, and perhaps even earlier, retirement.”
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