Millennials are proving to be decent savers. About one in six millennials has managed to save about 6 months’ income worth of savings, while about 11 percent can boast between 4 to 6 months’ worth.
Even so, according to a NAB Special Insight Report, Australians need an average of $830,000 to feel financially free, yet millennials seem unfazed by this huge figure.
Are millennials taking retirement planning too lightly? Check out these retirement-planning tips catered to Australian millennials:
Don’t rely solely on your superannuation.
The rise of gig economy – Uber, food deliveries, freelance jobs and many more – does not provide superannuation contributions, which typically stand at about 9.5 percent of wages.
When regular job swaps among millennials are also put into consideration, superannuation no longer seems to be a reliable option for a comfortable amount of retirement funds for these young people.
Start saving now.
It doesn’t matter if you have just started working your first full-time job or if you are still studying in college. Start saving as early as you can so that you will have enough funds for major life events in the future and enough to spare as part of your retirement funds.
Start saving now, even if you are not saving a lot, since every little contribution counts when it comes to saving for your retirement! As a general guideline, singles will need about $43,000 annually to retire comfortably, while couples will need a minimum of $60,000 for the same duration.
Pay off your debts, but save an emergency fund first.
Study loans, car loans and every other possible loan are headaches for most of us. It’s best to pay the bare minimum on all the debts until you can also save an emergency fund. After all, encountering an emergency without the necessary funds will only cause you to increase your debts.
Ideally, you should have about 6 months’ worth of income in your bank to cater to unexpected expenses, and you can start paying off your loans a little more aggressively once you have set aside this emergency fund.
Calculate how much you’ll need, and set a goal.
When do you plan to retire? Calculate how much you will need while factoring in travel fees, relocation expenses, medical bills, inflation and any other hidden costs with a ballpark savings figure.
Once you have worked out this figure, you can set a goal for how much you need to save before you retire, and start working toward it. This calculation can help you determine if you need to start cutting some budgets or if you need to start generating an additional income source, stat.
If you’re not sure how to calculate this figure, you can hire a wealth management adviser to work through it with you.
Create additional income opportunities.
Cutting out some unnecessary expenses would be friendly to your monthly budgets, but you would fare better by creating an additional income opportunity, as well.
Having a full-time job already might be taxing enough, but additional income can come from something as simple as tutoring, selling handmade crafts and drawings on Etsy or even dog walking.
Every little gig counts, and 35 percent of millennials already hold a side job to support themselves this way.