Millennials, Gen Z on track to reap comfortable retirement on super

Millennials and Gen Z Aussies might be locked out of housing, but in one area of economic life they are in prime position.

Young Aussies might be locked out of housing and swamped with cost-of-living pressures, but in one area of economic life they’re sitting in prime position: retirement.

The country’s younger cohort are on track to retire comfortably, a leading superannuation fund says, as millennials and Gen Z workers reap the benefits of a rising super guarantee.

“A comfortable retirement is definitely achievable for Gen Z and millennials,” AustralianSuper chief member officer Rose Kerlin told NewsWire.

“And that’s thanks to the world-class super system we’ve got.

“If you think, the benefit of having a super guarantee for those generations of around 10 per cent or higher, because it’s going to get to 12 per cent next year, for most of their working life, Gen Z will gain the most from compounding interest.

“So their contributions, plus the gains they get from their investments, will make a dramatic difference in retirement.”

Some 33 per cent of millennials say they would have between zero and $10,000 in retirement savings without compulsory super payments, a new survey from the fund states, and 15 per cent of all Australians report they would have no retirement savings at all without super.

Millennial and Victorian mum Madison Harris said she was a part of that cohort.

“I definitely don’t have any capacity to be putting money away for savings,” she told NewsWire.

Victorian mum Madison Harris says she would not have any retirement savings without compulsory Super. Picture: Supplied

“If I had capacity for savings, it would be going towards the things I need now and I wouldn’t be worrying about retirement, even though I know it’s important.”

She said she and her husband were working hard just to cover general cost-of-living pressures, mortgage payments and car loans.

“We are still only just getting by, and there is no room for savings of any kind really.”

To retire comfortably, the Association of Super Funds Australia estimates a single person needs $595,000 put away by the age of 67 and couples need $690,000.

“I’m grateful for it (the super system) because I know that I have something sitting there and ready to go if I can’t save for myself.”

Originally published as Millennials, Gen Z on track to reap comfortable retirement on super