Australian Dream alive, but not well among Millennials

• New research by Rest Industry Super sheds new light on millennials’ attitudes towards property ownership and retirement
• Over half (53%) of millennials are concerned that the increased cost of living means they won’t be able to save enough for a comfortable retirement
• Nearly one in three (30%) of millennials are concerned they will have to give up work to look after their parents in retirement, or that their parents will come to them for money

Research released today by Rest Industry Super, one of Australia’s largest superannuation funds, has revealed that while the Australian dream of home ownership is still relevant to millennials, it is rapidly slipping out of their reach.

The study, conducted earlier this year, of over 1,000 young Australians aged 18-34 revealed that the majority (87%) believe the Australian dream of home-ownership is just as important to them as it was for their parents. However, four in five (80%) are concerned they’re not on track to achieving the Australian dream. 52% say it has been put out of reach by the increasing cost of living and rapidly rising house prices.

Despite concerns about the affordability of housing, the desire to own property is still very apparent within this age group, with over half (55%) of those surveyed saying they’d sooner save for a property than retirement.

Rest Industry Super CEO Mr Damian Hill said that while it was a good thing that young Australians were keeping an eye on their financial situation, it was just as important they plan for 50 years’ time, not just the next five.

“For people in their twenties, retirement can seem a long way off, but the reality is that this is the perfect time to start putting aside a nest egg for your retirement,” said Mr Hill. “Even if you’re only able to put aside an extra ten dollars a week through a voluntary contribution, this could provide an additional $48,000^ extra in retirement income.”

The survey also probed the concerns of millennials whose parents’ retirement is fast approaching. It reveals that almost one in three (30%) of millennials are concerned they will have to give up work to look after their parents, or that their parents will come to them for money in retirement.

“It’s concerning to see so many millennials worried about the impact their parents’ retirement will have on their own financial wellbeing. I’d encourage millennials who are concerned about this to start putting a little extra into their own super, to make sure they don’t become a burden on their own relatives in retirement,” said Mr Hill.

In addition, millennials surveyed said they were concerned about the long-term impact of rising living costs with over half (53%) believing that the increased cost of living meant they wouldn’t be able to save enough for a comfortable retirement. Further, 39% admitted they had absolutely no idea how they’d fund their retirement, while less than half (46%) were actually saving for their retirement, whether through compulsory superannuation or personal investments.

“If you’re one of the three in five young Australians who are concerned about how they’ll fund their retirement, the good news is that there are three simple steps every individual can take to get the most out of their super. Firstly, take your superannuation fund with you when you change job – this will ensure you don’t wind up paying two sets of fees which can eat away at your retirement savings,” said Mr Hill.

“Secondly, if you do have multiple superannuation funds, or have lost track of a superannuation account from an earlier job, look into consolidating your superannuation with a single fund, which again can stop fees eating into your retirement#.

“Thirdly, it’s worth checking in with your super fund to make sure you have appropriate insurance cover, as the total permanent disability and income protection cover offered by some funds could make a huge difference if you find yourself suddenly unable to work,” said Mr Hill.

In order to assist its members into a financially stable retirement, Rest Industry Super pays for its member’s first super-related question over the phone with Money Solutions, a team of financial coaches and planners, as part of membership*.
  ^ Source: Small changes can make a big difference to your retirement: ASFA 5 September 2014. Visit the independent Super Guru website www.superguru.com.au for more information and to use their calculators and other tools.For a person aged 30 with a moderate investment option.  Savings are assumed to be added as regular, after-tax monthly contributions into a savings account. Any contribution limits relating to a specific savings account are ignored. The calculator assumes all contributions can be saved without additional tax or fees. Investment returns are assumed to be consistent for the duration of the savings period.  The costs of the everyday items are estimates and do not necessarily represent the exact cost to you if you were to give up the item, at the specified frequency, as represented in the calculator. The cost of each everyday item shown in the calculator is assumed to remain the same for the duration of the savings period. The effects of inflation on the cost of the item are ignored meaning the increase in savings is shown in today’s terms. Investment period: when calculating how much extra you could save, it is assumed your investment period ends at age 65.

# Rest recommends that you consider the impact consolidating your super may have on any insurance or benefit entitlements you have in your other fund(s) and seek advice from a licensed financial adviser if you have any questions.

* Money Solutions Pty Limited ABN 36 105 811 836, AFSL No. 258145.  Money Solutions personnel are not representatives of the Trustee.  Any financial product advice given by Money Solutions is provided under the Money Solutions AFSL.  The Trustee does not accept liability for any loss or damage incurred by any person as a result of using products or services provided by Money Solutions.

*Ratings or awards are only one factor that you should consider when deciding how to invest your super. Further information regarding these awards can be found at rest.com.au. SuperRatings Pty Limited does not issue, sell, guarantee or underwrite this product. Go to www.superratings.com.au for details of its ratings criteria.

This material doesn’t take into account your circumstances. So, before acting on it, you should consider whether it is appropriate for you.  Before making a decision about your super, please read the relevant Product Disclosure Statement available at www.rest.com.au. This information is provided by the issuer, Retail Employees Superannuation Pty Limited, ABN 39 001 987 739 as trustee of Rest (Retail Employees Superannuation Trust ABN 62 653 671 394).