Millennials reliant upon super for retirement

Peter Terlato 7 February 2017 NEWS

household

Most Aussie households are ready for retirement.

The majority of Australian households are on track to achieve a comfortable retirement but millennials will need to save more than other generations and superannuation will play a vital role in their financial future, according to new research.

The latest CommBank Retire Ready Index reveals more than half (53%) of Aussie households are expected to have enough superannuation savings, personal assets and age pension funding for retirement, while one fifth (18%) are anticipated to have 80-99% of necessary finances.

The comfortable retirement standard is set by the Association of Superannuation Funds of Australia.

While these figures are encouraging, the research found that when the age pension is removed, the number of retirement-ready households drops dramatically to 17%, and to just 6% on super only.

Super will play a prominent role for younger generations, such as millennials, comprising around 78% of total retirement assets for 25-year-olds working today.

Taking control of your superannuation early, consolidating funds and making additional contributions can help you stay on track for a comfortable retirement.

Women are less prepared for retirement than men, given their longer life expectancy, lower average income levels and reduced savings as a result of career breaks, such as having a child.

A separate research report has found self-managed super funds (SMSFs) with a balance of $200,000 or more are likelier to outperform smaller funds as a result of greater diversification opportunities.

The latest data shows Australian superannuation funds total assets for financial year 2015/16 comprised almost $2.1 trillion, of which almost one third was held in self-managed funds.

If you're looking to switch funds, consolidate your super, better manage your self-employed savings or take out income protection for your nest egg, it's best to compare options and make the right decision.

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