Gen Ys have a realistic idea of how much they need to retire, a basic understanding of the age pension and an idea of how they will use their money in retirement, new research has found.
Gen Y & Superannuation: Why won’t they engage?, commissioned by the Australian Institute of Superannuation Trustees (AIST) and conducted by Colmar Brunton, was launched at the Conference of Major Superannuation Funds on the Gold Coast yesterday.
The research, conducted late last year, found that Gen Ys first thought about their superannuation at age 24 – as opposed to the over 55s, who didn't think about it until they were 42.
Gen Y respondents believed they would need between $30,000 and $60,000 a year to retire, and thought superannuation would supplement 40 per cent of their total income.
AIST chief executive Tom Garcia said the fact that Gen Ys were thinking about superannuation at an early age was encouraging.
“It will give them more time to plan for an adequate retirement, [but] whether they let their fund know when they change addresses is a different story,” he said.
“Super funds need to be mindful of their demographics, and present material that is in the language of that demographic, keeping in mind the best avenue to use and how deeply they need to engage,” said Mr Garcia.
The research also showed that 63 per cent of Gen Y respondents plan to use their super as a retirement income stream.
“It’s good to see that Gen Y understands the importance of using their super to provide income in retirement and shows that as an industry we must reframe the language from account balance to income stream,” said Mr Garcia.
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