The latest analysis of the superannuation industry has shown generation Y having a very healthy attitude toward retirement saving, reinforcing recent demographic shifts in the SMSF sector, an industry technical expert has said.
The “RaboDirect Financial Health Barometer 2017 Super & Retirement Report” found 40 per cent of gen Y individuals were making voluntary contributions to their superannuation fund, up from 30 per cent in 2016.
The study also found 55 per cent of gen Y respondents believed they would have enough super to fund a comfortable or modest retirement compared to 31 per cent for gen X and 30 per cent for baby boomers.
Commenting on the results, SMSF Association head of technical Peter Hogan said the level of engagement and preparedness for their retirement years demonstrated by gen Ys has also been reflected in recent SMSF trends shown by ATO statistics.
“An interesting statistic outside the context of this research is the ATO is saying now the largest demographic group of people setting up self-managed super funds are not the traditional people we all think have them, which is the 55 [year olds] or 50 [year olds] or 60 [year olds] or 65 [year olds],” Hogan said.
“It’s actually the 35 to 40 year olds actually setting up self-managed superannuation funds for themselves in terms of new funds being set up that’s the biggest group.”
He suggested the statistics indicated the younger age bracket was receiving more financial advice as well, which was another behavioural finding in the RaboDirect report whereby 71 per cent of gen Y participants were using or planned to use a financial planner.
Rabobank head of research and analytics Glenn Wealands confirmed gen Ys were demonstrating the best retirement savings behaviours when compared to their gen X and baby boomer peers.
“They’re more likely to have long-term goals, more likely to have tools in place to track their progress, but at the same time they’re very optimistic and perhaps they’re a little bit too optimistic,” Wealands said.
The RaboDirect report has been compiled annually since 2011 and in 2017 the findings were based on a survey of 2300 Australians between the ages of 18 and 65.