Generation Rent: How do you retire?
A very interesting article in this weekend, “Generation Rent: never buying a property will mean saving more for retirement or the big question it alludes to Generation Rent: How do you retire?
The article correctly points out that Generation Rent will retire into an aged pension and superannuation system that was not set up for people who rent. Recent figures released also point to the fact that one third of all private renters are now classed as ‘long-term’ this figure rising from just one quarter twenty years ago.
Generation Rent faces something no other generation has collectively experienced before – renting in retirement
Terry Burke from Swinburne University states, “Income support systems are premised on outright [home] ownership and therefore Australian pensions tend to be much lower than equivalent countries,”
In Sydney, if you live in the city’s cheapest suburb, Marsden Park, and you retire owning your own average-priced home, you will still be $360,000 better off than a renter. Of course, we have seen the median price of property in Sydney exceed $1 million for a short time so it would stand to reason that most renters will never accumulate this amount of funds without being in the property market.
The Association of Superannuation Funds of Australia data estimates that for someone to afford a comfortable retirement at 65, a single would need $545,000 and a couple would need $645,000, REST Industry Super chief operating officer Andrew Howard said.
Financial experts say it is possible, although challenging, for lifelong renters to comfortably cross the finish line into retirement.
After income dries up, a larger nest egg is needed and savings from not having a mortgage need smart investment. The key would be to invest the difference rather than simply saving, so why not contact Lime now and learn how easy it can be to be a rent-investor? http://goo.gl/1fvwnf
