Retirement is a significant milestone in everyone’s life, and it’s essential to be prepared financially. But how much superannuation do Australians actually have at retirement? The answer may surprise you.
Average Superannuation Balances
According to the Australian Taxation Office (ATO), the average superannuation balance for Australians aged 60-64 in the 2021 financial year was $361,539. This figure is significantly lower than the $590,000-$690,000 recommended by the Association of Superfunds of Australia (ASFA) for a comfortable retirement.
Gender Gap in Superannuation
The gender gap in superannuation is also a significant concern. The ATO data shows that the average super balance for men aged 60-64 is $402,838, while for women it is $318,203. This gap of $84,635 highlights the financial disadvantage faced by many women in retirement.
Factors Contributing to Lower Super Balances
Several factors contribute to the lower-than-expected superannuation balances of Australians at retirement. These include:
- Lower wages for women: Women typically earn less than men throughout their careers, resulting in lower superannuation contributions.
- Career breaks: Women are more likely to take career breaks for childcare or other family reasons, leading to gaps in superannuation contributions.
- Part-time work: Women are more likely to work part-time, which often means lower superannuation contributions.
- Higher life expectancy: Women tend to live longer than men, meaning their superannuation needs to last for a longer period.
Strategies to Improve Superannuation Balances
While the average superannuation balance may be lower than ideal, there are strategies you can implement to improve your own superannuation situation:
- Increase voluntary contributions: Consider making additional contributions to your superannuation, especially in the years leading up to retirement.
- Consolidate superannuation accounts: Having multiple superannuation accounts can lead to unnecessary fees and charges. Consolidating your accounts can help you save money and improve your overall superannuation balance.
- Choose a high-performing superannuation fund: The performance of your superannuation fund can significantly impact your retirement savings. Choose a fund with a strong track record of investment returns.
- Delay retirement: Working for a few extra years can give your superannuation balance more time to grow.
- Downsize your home: If you own a valuable property, consider downsizing to a smaller home and using the proceeds to boost your superannuation.
While the average superannuation balance of Australians at retirement may be lower than expected, there are steps you can take to improve your own financial situation. By implementing the strategies mentioned above, you can increase your superannuation savings and ensure a more comfortable retirement.
Additional Resources
- Australian Taxation Office (ATO): https://www.ato.gov.au/
- Association of Superfunds of Australia (ASFA): https://www.asfa.com.au/
- AustralianSuper: https://www.australiansuper.com/
Disclaimer:
This information is for general educational purposes only and does not constitute financial advice. Please consult with a qualified financial advisor for personalized advice.
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Everyone is talking about how much money we need in Australia to retire comfortably. However, we seldom pause to consider the truth about how much or how little money people actually have in their superannuation fund when they reach retirement age.
At barbecues, we don’t politely discuss how much we each have stashed away, especially if we worry that it might not be enough. Thus, I go in-depth today on the typical superannuation balances of people who are currently between the ages of 55 and 69.
The super accounts of the current generation of retirees and soon-to-be retirees aren’t quite super enough. Credit: Simon Letch.
We should all be able to view these numbers more widely because they are significant. They show that there isn’t nearly enough money in most people’s accounts for the current generation of retirees and soon-to-be retirees to be comfortable, and that women are undoubtedly in a less favorable situation.
As far as we are aware, the Association of Superfunds of Australia (ASFA) recommends that, in order for Australian retirees to live comfortably after retirement, they should have either $590,000 or $690,000 in super if they are a single person or a couple. And that’s presuming they can live off of a partial pension and have paid off their house.
However, the most recent superannuation data for 2020–21 from the Australian Tax Office indicates that the average superannuation balance for individuals between the ages of 55 and 59 is $277,327. It is $361,539 for people 60–64 and $428,738 for people 65–69.
There is a clear disparity between the super balances of men and women. For example, the average super balance for men between the ages of 55 and 59 is $316,457, while the average for women is $236,530. A gap of nearly $80,000. The average income for men and women between the ages of 60 and 64 is $402,838 and $318,203, respectively, meaning that there is a nearly $85,000 difference. Additionally, the average balance for men between the ages of 65 and 69 is $453,075; for women, it is $403,038; the difference is $50,000 less.
The average age of retirement in Australia is between 64. 5 years for women and 65. 3 for men right now. However, 60 is now the preservation age—the age at which, depending on your employment status, you can actually begin taking withdrawals from your superannuation fund through a transition to retirement or retirement pension. Additionally, the pension age is set firmly at 67, which means that a large portion of the current generation will need to work until that time.
You can still try to improve your situation if you are feeling pretty “average” knowing that your superannuation fund is below the comfortable threshold—which is, to be honest, the case for the majority of Australians. Think about a few of these:Advertisement.
Consider your appetite for growth investments. Examine the degree of risk your superannuation fund is taking on when investing your money, and think about how much risk you can tolerate. Through the power of compound investing, you should be able to double the value of your superannuation fund over a 7–10 year period in the accumulation phase if you can earn an income of between 7 and 10% annually.
If you can see ten years of work ahead of you and you are in your mid- to late-50s, that could be a powerful opportunity. For growth funds with 61 to 80 percent exposure to growth assets, the 10-year average is 7. 5% currently, compared to the ASX200’s 9% 10-year performance. 2 per cent, so it could be achievable.
Think about downsizing. While downsizing isn’t something that everyone wants to do, it might make sense if you live in a priceless home and have limited assets from which to draw retirement income.
Individuals who downsize and have lived in their current residence for ten years or more should be qualified for the downsizer contribution, which is a tax-free superannuation contribution of up to $300,000 for single people and $600,000 for couples.
This is a huge opportunity, considering how much Australians have invested in their properties after five decades of rising real estate prices.
Increase your voluntary contributions before retirement. Several individuals can greatly increase their super balance in the final ten years before retirement by increasing their super contributions during these years and utilizing both concessional (before tax) and non-concessional (after-tax) contributions. Don’t wait to make contributions—the earlier you do, the longer they will have in super to compound.
Delay retirement. Although it’s a difficult choice, working past the typical retirement age can make sense and significantly boost your superannuation savings. Additionally, it enables you to postpone taking out superannuation, which could eventually result in a more comfortable retirement.
Look for part-time work. Consider going part-time, casual, or consulting instead of retiring completely. This can enable you to support your retirement with additional income while continuing to enjoy more free time, and it can also reduce the amount of superannuation you need to take out in the early years of your retirement or transition to retirement.
This period can be a critical compounding opportunity. Your super fund will keep growing if it returns seven to ten percent annually and you only take out four percent in the first years through a TTR strategy.
- The guidance provided in this article is broad in scope and is not meant to sway readers’ choices regarding financial products or investing. Before making any financial decisions, they should always consult a professional who understands their unique situation.
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Average Super Balance By Age 2023 (Official Statistics)
FAQ
How much super do most Australians retire with?
|
Age
|
Average super balance – men
|
Average super balance – women
|
|
45-49
|
$237,200
|
$158,100
|
|
50-54
|
$289,900
|
$191,400
|
|
55-59
|
$359,100
|
$233,200
|
|
60-64
|
$338,700
|
$261,000
|
What is the average wealth of retirees in Australia?
How long will $1 million last in retirement?
How much money do you need to retire with $100000 a year income?
How much superannuation do you need at 67?
The average superannuation balance needed at age 67 for a comfortable retirement is $690,000 for a couple and $595,000 for a single person, according to the latest Retirement Standard document from the Association of Super Funds of Australia (ASFA). That’s assuming they withdraw their super as a lump sum and receive a part of the Age Pension.
How much Super do Australian retirees need?
As we know, the Association of Superfunds of Australia (ASFA) suggests that to be comfortable Australian retirees need to have $590,000 in super if they are single when they retire, or $690,000 if they are a couple. And that’s if they have paid off their home and able to rely on a part-pension.
What is the average superannuation balance in Australia?
And that’s if they have paid off their home and able to rely on a part-pension. Yet, the Australian Tax Office’s latest superannuation statistics for the 2020/21 year show that the average superannuation balance for people aged between 55 and 59 is $277,327. For those aged 60-64 it sits at $361,539, 65-69 it is $428,738.
What is the average age of retirement in Australia?
The average age of retirement in Australia is between 64.5 years for women and 65.3 for men right now. But preservation age, or the age you can actually start drawing down from your superannuation fund either through a transition to retirement or retirement pension, depending on your work status, is now 60 years of age.