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Investor behaviour

Talkin' 'bout your generation

Were you at Woodstock or the Big Day Out? Do you prefer Cliff Richard, Michael Jackson or Lady Ga Ga?

Your answer most certainly depends on your generation and so may your attitudes about retirement, saving and investing. Baby boomers, Generation X and Generation Y all approach saving and retirement planning differently.

Baby boomer – born 1945-1965 (48-67 years old)

Baby boomers have been called many things: hippies, yuppies, mum and dad. Over 5 million Australians fit into the Boomer bracket. Many started saving for their retirement in their 40s and 50s and will use the sale of their homes or inheritance dollars from their parents for retirement. Quite a few are planning 'hybrid' retirements whereby they transition into retirement by continuing to work either full or part-time.

Generation x – born 1965-1980 (32-47 years old)

Australians in their 30s and early 40s are stereotyped as having young kids and struggling to achieve the great Australian dream of owning a house. Many Gen Xers have large student loans to repay and credit card debt. Gen Xers should start saving for their retirement now, regardless of income levels so they can benefit from compounding returns.

Generation Y – born 1981-1990 (31-22 years old)

Generation Y are now in their 20s and early 30s. They are marrying later and often live with their parents into their late 20s. Many are currently accruing the student loans that Generation Xers are now paying off. Generation Y are in the best position to make saving for retirement easy, but many do not consider it something that they need to do right now.

What to do?

For all generations

As a starting point you should work out just how much is enough for your retirement. Armed with this information you can then take the next steps to getting your super on track.

If you’re a BOOMER

It’s never too late to boost your retirement savings. Remember contributions and earnings inside super are taxed at a maximum of 15% whereas investing outside of super generally attracts tax at marginal rates, which for most people is greater than 15%. If you are 55 or over you may want to consider a transition to retirement strategy.

If you need personalised advice, talk to a financial adviser to discuss your options.

If you’re GENERATION X

Don’t delay in saving, many Boomers wish they had started saving for retirement at your age. If you are not in a position to top-up your super straight away you can still check the results of our investor style quiz to determine whether your risk profile matches your current investment strategy.

Do you have more than one super fund? If you do, you can avoid paying multiple sets of fees by consolidating your super into one fund.

If you’re GENERATION Y

The power of time and compound returns means you can afford to contribute less than Gen X. Of course, more is better, so now is as good a time as any to start contributing a little extra to super.

A high risk investment is certainly an option if you are a Gen Yer as any speed bumps in return on investments now will have a small impact on the final outcome.

More help and information

Contact your financial adviser or speak to a member of our Helpline team if you need information about your super and retirement. If you need tailored advice we have selected a panel of financial advisers who we believe are best placed to provide our members with personal financial advice. To find an adviser in your area, contact the Helpline on 1800 555 667.