Every generation thinks life will be different for them – and of course, they’re right – but when it comes to planning for the future, young people have a habit of thinking they have plenty of time. After all, when you’re in your mid-thirties or even early forties, retirement is still decades away (later if the government decides so!).
However, like anything forgotten too long, the years pass quickly and the time we could have used constructively has disappeared. For example, early Generation Xers are now on the countdown to retirement. If you want to be different today, plan to be different tomorrow.
Start with your grandparents…
What did their working life and retirement look like?
Let’s imagine your grandparents are both in their eighties. It is likely Grandad started work in his teens and worked for one employer for most of his life. He retired at 55. Grandma may not have had much paid employment, if any. Their life can be broken into three phases education, work and leisure. They probably didn’t’ t imagine retirement would be as long as it has turned out to be. They’re still healthy, have outlived their savings and are relying solely on the age pension to fund their frugal lifestyle.
Then your parents…
What did their working life look like?
What might their retirement look like?
Let’s imagine your parents are aged in their sixties – typical baby boomers. They were better educated than their parents and both worked, though Mum took time off to raise the kids. They accumulated quite a bit of superannuation, though Dad has more than Mum. Their life can be broken into the same three phases. Education went on into their twenties and they studied during their working lives. They worked for a few employers and ended up in careers they never imagined in their youth.
Whilst they have long talked about retirement, now that it’s getting closer they face it with some trepidation. They may consider moving to part-time work that will give them more freedom, keep their minds stimulated and still have enough to pay the bills. After all, now the kids are independent and the mortgage is paid off, life is cheaper. It would be nice to have more time to travel and do the things they would like to do. They are both fit and healthy and if they live as long as their parents that will be 20 or 25 years of leisure. Will Mum and Dad have enough money to live a comfortable lifestyle for that long?
And what about you?
Unlike your parents, you and your younger siblings are not going to rely on one employer or even one career. Balancing life and work is more important as you take time off to travel, do volunteer work or try new adventures. And being so versatile, when you resume your career you simply get re-trained. What this means is that you will have multiple periods of education-work-leisure in your life and as you will probably be much healthier than previous generations you don’t see working longer as a problem. But will you be able to afford 20 or 30 years with no income? That’ s a sobering thought at any age.
How to be different now
Many social commentators class Generation X as stuck in between the two “noisier” and more well-known generations – Baby Boomers and Gen Y – but that doesn’t mean you should fade into insignificance. Be the first generation to truly take control of your retirement at a younger age. Stop the trend and talk to us about the many strategies available to give your retirement saving the boost it needs.
Take control of your finances and talk to one of our Financial Planners today by calling 1300 766 165