Late boomers, generation X and Y
have contributed to their
superannuation fund for most of their
working lives and are expected to be
largely self-funded in retirement from
the mid-2020s onwards. However,
there is a large gap for the baby
boomers retiring now between the
Generational
financial
strategies
superannuation they have and the
amount they need for retirement.
Either generation X and Y will be
forced to support them in the form
of more taxes, or Australia will need
to import more taxpayers to spread
the load. [3]
Each generation has its own
financial challenges and
strategies vary depending on
the stage of life people face.
Age 25-35: With a higher disposable income and less family expenses, this is
a good time to accumulate assets.
Aged 35-45: Paying down the mortgage and increasing home equity is the
focus.
Age 45-55: Now is the time to shift focus to extra contributions to the
retirement nest egg. Debt elimination remains a priority.
Age 55-65: Preservation of investment capital becomes more of a priority in
addition to accumulation of capital. The last years of work should be devoted to
topping up superannuation contributions.
Source: ‘Super success achieved in stages;, 28 July, 2013, The Sydney Morning Herald, viewed 15 November
Market conditions
Whether the retirement age should
be lifted to 70 along with compulsory
superannuation being increased from
9.25% to 12% are among the policies
being explored[4] to cope with a “big
Australia”. The Australian Bureau of
Statistics recently projected the
population would surge to 38 million
by 2051.[5]
[1] ‘We are at a population tipping point’, 6 December, 2013,
The Australian Financial Review, viewed 15 November, 2013
[2] ibid
[3] ibid
[4] Commonwealth Government – Department of Treasury
[5] www.abs.gov.au
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