Lately there have been a lot of reports about the money struggles that millennials face.
A video featuring Simon Sinek went viral where he talked about the social challenges millennials face.
But what about the financial ones?
I wanted to take a look at how millennials fare financially and ask the question, who is really doing it tougher – millennials or baby boomers?
When it comes to property…
Millennials: Struggling to get into the market
Interest rates are as low as ever in the current market, but house prices, especially in Sydney and Melbourne, are continuing to go up, and up, and up.
Many millennials are struggling to get a foot in the front door, let alone their very own key in their hands, and a lot of them are choosing to rent rather than buy as a result.
Senior Australians: Benefited from sky-rocketing house prices
Older property-owner Australians have certainly benefited from the increase in house prices over the years, a lot of them currently living in very valuable properties well into their retirement.
But that’s not to say they didn’t work hard for the privilege.
Interest rates in the 1980s were up to 17-18 per cent – that’s more than four times a current competitive rate.
When it comes to income…
Millennials: Earning less that their ancestors
A recent UK-based study by the Resolution Foundation found that people under 35 earned £8,000 less in their twenties than the previous generation.
The report also suggests that they could become the first generation to earn less than their predecessors.
Given a lot of millennials entered the workforce during a market downturn, the “poor start” to their careers is not surprising, despite that they are generally more educated.
Senior Australians: High asset values but low incomes
Though a lot of senior Australians are asset-rich with significant value in their primary residences, they are surviving on low incomes.
For example, they could be living on as low as $22,000 per annum for a single, or $34,000 for a couple – the standard age pension.
When it comes to super and retirement…
Millennials: Mandatory superannuation their whole lives
Millennials are joining the workforce and immediately opening their first super account which means they’ll be accumulating at least 9.5 per cent of their income into a growth account from as young as age 15.
But, they’ll also need to work longer with retirement age, the age you can access the pension, already increasing and targeted to be age 70 by 2035.
Senior Australians: Relying on the aged pension
Mandatory super contributions came into effect in 1992 so for people retiring this year, they have only had mandatory super for a maximum of 25 years.
That means that many senior Australians are retiring on limited super and heavily relying on the age pension.
