More Australians are saving their monthly disposable income, however we’re still surprised to realise that very few young Australians are saving for retirement.
Despite the fact that more Australians are saving 10 per cent of their household disposable income, The Reserve Bank says people are banking their money or paying down mortgages because of a “change in households’ attitudes towards debt and financial vulnerability”.
50 per cent of young women are currently putting aside money for their first property where they are also taking advantage of the Co-contribution- Bargain Hunters.
It’s a widely known fact that women in general face challenges and obstacles in saving for retirement, which should place retirement planning at the top of their to-do list. However young women are not preparing for their retirement years, and do not realise that the earlier they begin investing for the future the less they will need to save once they approach retirement.
What ever their expectations for retirement may be, young Australians say they have more pressing financial priorities than putting money aside for old age.
- Saving money for rainy day emergencies and near-term needs
- Putting money aside to buy a property
- Saving up to go on a holiday
- Putting money aside to buy a new car
- Women of Generation Y tend to carry a view that retirement is far off in the distance but the reality is members of this generation have much longer life expectancies than their Baby Boomer counterparts.
In the past, Baby Boomer retirees only needed enough money to live for a few years after they stopped working. Now, as people continue to live well into their 80, 90s and beyond, the young generation need to make sure they have enough money for these extra years.
If you’re a woman and retire at the age of 65, then you need to plan to be living the life of a retired lady for, on average, nearly 22 years – possibly as long as your time in the workforce, or as long as the time spent rearing children. Retiring at the age of 60 will mean that you need to finance 26 years of your life of leisure.
If saving for your retirement sounds like too much planning and hard work, you can always try the ostrich option. The ostrich is the largest bird in the world and is famous for sticking its head in the sand during times of stress. Sticking your head in the sand is definitely an option if you want to be scratching around for financial scraps when you retire.
Now is a good time to take your head out of the sand, rather than spending your days in financial darkness.