Will you be renting in retirement?

Money and Life
(Financial Planning Association of Australia)

For some people, super may be the most valuable asset they’ll ever have. So it makes sense to know how much they have and how it’s invested. But it’s very often the case that young people, in particular, see super as being something that’s of low concern. So how can the super industry get young people interested in something they won’t benefit from for years to come?

With home ownership rates falling, particularly among younger people, the super stakes are getting higher. Current annual estimates for living costs in retirement – called the retirement standard – assume you’ll be living rent and mortgage-free in your own home by the time you leave work. However, this owner-occupier status in retirement is becoming less common, causing concern about whether people in retirement will have enough income to live on.

Super hurdles to overcome

But these trends and their consequences aren’t really on the radar for younger generations. Millenials and Gen X are struggling with uncertainty about their immediate future as they stare down the barrel of Industry 4.0, feeling unprepared and under threat of becoming obsolete. According to results from the Deloitte Millenial Survey 2018, only 36% of Millenials and 29% of Gen Xers believe they have what it takes[1] to succeed in the workplace once the next level of technology and automation takes hold.

So it’s no wonder messages to young people about the importance of super aren’t leading to action. Being told super is an all-important asset holds no interest for them, nor does the allure of compound interest as the secret weapon of young super savers. Into this arena of millennial anxiety steps Zuper, a brand new super fund launching in July 2018. CEO Jessica Ellerm, CPO Jon Holloway, and Founder and Chief Creative Officer Eran Thomson are part of a team determined to break the disengagement deadlock that’s keeping young people from taking control of their super.

Where the industry is coming from

Having moved to Australia from the USA 16 years ago, Eran was mystified by super guarantee contributions appearing on his pay advice. “I didn’t pay much attention to those figures and no one explained it to me” says Eran. “Years later I got my first communication from my super fund and it was a letter announcing my account would be closing as it no longer had money in it. Insurance and management fees eroded the whole balance. I’