Boomers versus fumers firing up the super debate
I know it’s difficult for 1970 to speak to 1987, but let’s have a bash.
We are kids who grew up without safety barriers. No-one came to our sports day and no one told us we were good at anything.
Boomers have more money and you are better with technology. We’re the sandwich filling. The ‘‘doers’’ who try to keep you both happy.
The next election may well be won or lost depending on the reaction of your generation.
This assumes your current salary increases by 1 per cent a year until age 65 (a good career will far exceed that) and your savings mirror this – meaning $500 added this year is followed by $505 next year.
It also relies on your fund manager making a return of 2 per cent a year after fees and tax and on top of inflation.
If they achieve this, there will be more than $30,790 available, but its purchasing power will be roughly the same as it would today.
Percentage wise, most people need to save an additional 0.5 per cent to 1 per cent of income in order to pay for the age65 option.
The generation of 40-somethings on low income is worst off. They don’t have time on their side. To compensate they’ll need to start putting an extra 1.5 per cent to 2 per cent of their income away. Millennials will achieve it by adding another 0.5 per cent.
A healthy retirement actually involves a savings contribution of 10 per cent of income.
Most of us are not doing this. But at least by adding 0.5 per cent millennials can make a decision on which way they want it taken out of their wallets. Now it’s quantified, have a think about it.