Millennials have been given a shocking wake up call by an experiment on Ten’s The Project which spells out how few are ever going to be able to retire comfortably.
Ellie Fordham from Dozzi Financial Advice revealed that anyone retiring today will need $545,000 in their superannuation account if they’re single or $640,000 for couples – but they’ll still need to own their home and rely on the aged pension too.
But in an exercise with eight Millennials aged between 25 and 34, she told them they will need $1million in super whenever they want to call time on working.
‘If you’re single, you’re going to need close to $1 million in retirement assets to live without any debt, and a house that’s fully paid off, to not be reliant on the aged pension,’ said Ms Fordham.
Millennials have been given a shocking wake up call by an experiment on Ten’s The Project which spells out how far away many of them are from being on track to retire, Pictured here is Nikki who wants to retire on her own money and not be reliant on the government
Some of the participants were visibly shaken by the revelation – with one revealing he had just $20,000 in his super so far.
‘I don’t feel financially set yet, I don’t have much super so that’s why I’m here,’ said Josh. ‘That’s real scary, I’m 27 and I’m probably sitting at $20,000.
‘I feel a bit emotional to be honest. It’s a bit of a wake up call.’
Another Millennial taking part, Ben, 31, added: ‘I’m not quite sure if I would achieve that, even working full time and a stable job for 30 years.’
And his thoughts were echoed by Beth, 29, who added: ‘If Ben’s terrified, I’m petrified because I think out of everyone here, I think I’m the closest to that line.’
Ellie Fordham from Dozzi Financial Advice (pictured) told eight Millennials aged between 25 and 34 that they will need $1million in super whenever they want to call time on working
The exercise involved answering questions about their current situation, and depending on their answer, taking a step towards a red centre line representing potential retirement problems.
It highlighted the issues many face in building up their super including earning less than $63,000 a year, taking six months or more out of the workforce for any reason, withdrawn cash from their super or not added to their super contributions – and just being female.
Women’s super balances are generally 40 per cent lower than men’s and Ms Fordham asked: ‘How does it make you feel to already be at a disadvantage because of your sex?’
Nikki, 34, said she had taken three years out of the workforce to bring up her daughter before she started pre-school but still had ambitions to retire ‘on my own money,’ she said. ‘I don’t want to be relying on the government.’
Some of them participants were visibly shaken by the revelation – with one, Joshua (pictured) revealing he had just $20,000 in his super so far
Mum Beth added: ‘I have been a single parent, stay at home six, seven years so that’s a big chunk out of the workforce and out of my super so I have a lot of catching up to do.’
The punishing housing market is also destroying millennials’ hopes of an easy route to retirement, said Ms Fordham.
‘All the house prices jumped right up and that scared me off,’ said Eric, 26
Ms Fordham added: ‘The number of homeowners that are aged under 35 has halved since 1995. Most of the properties are now concentrated in the hands of 65 year olds or older.
‘This is really concerning when we consider how important it is to own your own home to be in a comfortable position for retirement.’
Project host Carrie Bickmore (pictured) was shocked that females were still being punished by the system for being mothers. ‘I’m so naive,’ she said. ‘I honestly thought we had come further than women still having 40 per cent less super than men’
Josh added: ‘I’m living at home, but I would like to buy my own home. Trying to afford a house now is crazy.’
Just one out of the eight participants said they felt confident about their super situation when the experiment ended.
Logan, 26, said he wanted to retire aged 40 and be able ‘to book a first class ticket to anywhere in the world and not have to look at the price.’
He added: ‘I’m 100 per cent on a good trajectory. I’m stoked with where I’m sitting today – it goes to show everything mum taught me has paid off.’
Co-host Steve Price (pictured) warned the new increased employer super contributions – which have gone up from 9.5 per cent of salary to 10 per cent – may come at a price for some
After the clip on aired on Monday night’s show, co-host Steve Price warned that the new increased employer super contributions – which have gone up from 9.5 per cent of salary to 10 per cent -may come at a price for some workers.
‘People should also understand that this half a percent increase will come as a pay cut for a lot of people because their salary package is inclusive of superannuation,’ he warned. ‘So you get less take-home pay.’
But host Carrie Bickmore was shocked that females were still being punished by the system for being mothers.
‘I’m so naive,’ she said. ‘I honestly thought we had come further than women still having 40 per cent less super than men.’