07 Aug Why Aren’t Gen Y’s Taking Super Seriously?
I believe that Gen Y’s haven’t taken their Super seriously due to either one, two or all three of these competing thoughts.
I don’t have enough Super for it to be worth my time.
Even for those who have a small amount of money in their Super they should always be looking for a better deal. Nearly 8 out of 10 Gen Ys admitted they have no idea how much they pay in fees and over a third do not know how much Super they have. You need to be constantly trying to find the best deal and the lowest fees and ask where they plan to invest your money. In the end it is YOUR money!
I can’t use the money until I retire so what does it matter?
This goes back to my previous point: it is your money! If you had $20 000 savings and wanted to grow and build it, would you put it in the bank offering you a 2.5% return or the bank offering you a 4.5% return? The same thought process needs to be put into your Super, even though you can’t access it until you retire, that 2% difference compounded annually can vastly change how much Super you are able to retire on.
I don’t earn enough right now, so I’ll wait until I’m earning more, then I’ll look at my Super
9.50% above your annual income already goes into your Super, even for those earning $32 354.40, Australia’s minimum annual salary. This is just over $3 000 a year, if you have been earning this for 4 years that is already over $12 000.
Here is an example of the difference this can make:
Person 1:
Interest = 2.5%
Starting Super = $20 000
Years until retirement = 35
Total Super: $326 788
Person 2:
Interest = 4.5%
Starting Super = $20 000
Years until retirement = 35
Total Super: $459 536
Even if you were to earn the minimum annual salary for the rest of your life, finding a better deal has the potential to net you over $120 000 extra in retirement.
It is never too early or too late to start saving for your retirement.
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