Many millennials don't want to hear about retirement. Yet they are the generation most at risk when it comes to securing an income for the later part of their lives, says Viresh Maharaj, the CEO of client solutions at Sanlam Employee Benefits.
You are a millennial if you were born between 1981 and 1996 - or are aged between 22 and 37 this year.
Generalising about an entire generation will always be problematic, but if you recognise these traits in yourself or a millennial close to you, take note.
Despite mostly being highly educated, millennials are often not financially savvy and many - according to the statistics in Sanlam's Benchmark retirement fund survey, released this week - have squandered what they have saved for retirement while changing jobs.
Maharaj says the average value of millennials' savings in the Sanlam Umbrella Fund - one of the largest umbrella funds in the country - is less than R42000. Even the oldest members of the generation have less than R90000 in the fund.
He says a middle-of-the-range 2018 starting salary for a university graduate is R250000 a year - as determined by PayScale, the site that publishes data about compensation for employers and employees. Maharaj used this to determine that a 37-year-old would have started in 2000 on R75000 a year.
He used this salary, adjusted each year for inflation, and determined that by saving 14% of their salary (7% by the employee and 7% by the employer) and earning a 9% return after costs each year, the average 37-year-old should have saved around R730000, or about three times their annual salary, by now.
Using the same method and assumptions, Maharaj says a middle-earning graduate millennial now aged 28 should have about R330000 saved, or 1.4 times their annual salary.
He warns, however, that these are based on averages, so should not be used to measure your own progress but rather as a yardstick for millennials as a group.
Millennials are not incapable of saving - there is evidence they save for goals like a holiday, Maharaj says. But people of this generation often associate retirement with ageing, and as a result saving for retirement is a grudge purchase.
As you would expect, being the generation at the start of their working lives, millennials typically have lower after-inflation earnings and much more debt than other generations...