Some (relatively minor) good financial news for younger Australians

If you’ve read anything online or in the finance section of your newspaper recently containing the words ‘young Australians’, it has probably been accompanied by the terms ‘housing affordability’ and ‘wealth inequity’.

Well – if you are part of this generation of Australians – I have some (admittedly minor) good news.

Based on a study by the Australian Centre for Financial Studies and paid for by NAB, the findings suggest that the majority of younger households in Australia are on track to retire comfortably.

The reason?

A combination of the extra years they have in front of them to contribute to super and the magic of compounding returns.

For a couple to have a comfortable retirement – allowing retirees to own a reasonable car, regularly eat out at restaurants, purchase good clothes, hold private health cover and take the occasional international holiday – MLC estimates that they would need a lump sum of around $510,000 (in today’s dollars) in addition to owning a home.¹

Using median returns, the youngest cohort of ages 40-44, should have accumulated $1,200,358 in household financial wealth by age 65.

I know it won’t effect your day-to-day lifestyle currently – but at least it isn’t more bad news!!

1              MLC (2015), ‘What Does a Comfortable Retirement Cost?’, News & Insights, 15 April

For the full study – http://australiancentre.com.au/wp-content/uploads/2016/10/job_554904_14-987_NBU10233_297x210_How_will_Australians_retire_Brochure_….pdf