I’ve done my bit to stoke the fires of the generation gaps over the years. And I’m old enough to have given and received plenty.
As a kid, I remember stubbornly shoving my fingers in my ears for an entire cassette of my parents’ vomit-inducing Foster and Allen on a long summer drive south.
I now wish I could stick my fingers in my ears when DebtBoy plays his music (I’ll politely call it “rap”) in the car.
But I can’t. I’m driving. The lyrics are foul — sometimes so bad I hit the skip button.
My Dad still hates Jimmy Barnes’ screaming vocals. My ears would probably still bleed if I heard Foster and Allen. And while I can handle some of the lyrical cleverness of Eminem and Drake, Lil Tecca and Kendrick Lamar are a few yards too far.
Some generational intolerance is understandable.
Super’s generational appeal
Age And Guile Beat Youth, Innocence And A Bad Haircut was the title of one of the late satirist P.J. O’Rourke’s book titles.
The title gets funnier as I age, particularly given DebtBoy’s current “mushroom do”. But it’s also apt about the appeal of superannuation, from Boomers through to Gen Z.
While music changes, superannuation in its broadest sense, hasn’t changed over the years. Get employers and employees to save for workers’ retirements is the base concept.
But generational attitudes to superannuation resembles, for instance, feelings for The Beatles. Boomers love, Xers are “OK. Whatever”, while Gen Y and Gen Z are “Who?”
Here’s how the generations see super, and what they should actually be doing.
Youthful exuberance
There ain’t a lot of love for superannuation in those under 40 — largely generations Y and Z.
There’s no connection to their piffling balances. What use is a pile of money in 25 or 35 years? They need the folding stuff for deposits, to feed mortgages and midgets — now.
Super is meaningless. A fabulous retirement is as relevant to them as Bob Hope, a cure for arthritis, and Zimmer frames.
Shame. Because they’ve got nothing to lose and could feed their super at retirement with 30 minutes work. Log into their super fund account, change their investments to aggressive, and organise even a relatively small regular contribution to super.
But, as is so often said, “youth is wasted on the young”.
Forty-somethings
Life is hectic. Careers and kids are keeping your blood pressure pumping like a 1990s nightclub party, but without time to actually “party-cipate”.
They’ve probably noticed their super. It might now be a few multiples of their ever-increasing salaries.
But, damn, those kids are expensive. And the mortgage from the upgraded second home is hurting more than ever after those interest rate rises.
They sort of know they should be doing something with super. Find some spare cash — lord knows they’re earning enough of it — and bang it into super.
Their finances will free up soon, when the mortgage is paid down and the kids get older. But they need to get ahead of that.
Superannuation has limits on tax-effective contributions, at $30,000 a year. They’re probably squandering money left, right and centre that could be contributed to top up their super.
Make the sacrifice. Whack a little extra into super. In 10 years from now, they’ll be kicking themselves if they don’t.
Work’s last decade
From some time in their early to mid-50s, the panic sets in.
“Bugger. I should have paid more attention to my super in my 40s. What can I do to maximise it now?”
It is spilled milk, but it’s the right attitude. They need to max their super contributions and check fees. See if a self-managed super fund might be an advantage (if they have a larger balance combined).
Get some advice. Make sure they’re invested as aggressively as they think you can handle, and run hard towards the finish line.
Done and dusted
And lastly, the generation who are done with work. Their ability to pump more into super is either limited, or a thing of the past.
It’s now about how they can squeeze the most out of their super, making it last as long as possible with appropriate returns.
Advice can still help here, particularly if they do have opportunities to contribute to super, such as inheritances, sale of assets, and reducing other taxable income.
Roll on the generation wars.
Bruce Brammall is the author of Mortgages Made Easy and is both a financial adviser and mortgage broker. [email protected]
Source Agencies
