How Much Does the Average Australian Retire With? A Comprehensive Guide to Retirement Planning in Australia

The average retirement age of the 140,000 individuals who retired in 2020 was 64. 3 years. For men, the average age was 65. 4 years and for women the average was 63. 7 years.

The most recent information, which was gathered between July 2020 and June 2021 and represents the state of the labor market at that time, is provided in this release of Retirement and Retirement Intentions. When analyzing the reasons why people were retired or unable to work during this period, ABS advises using caution. The rise in respondents choosing “Other” for some questions, as observed in previous ABS releases, is indicative of pandemic-related factors.

Planning for retirement is a crucial step towards ensuring financial security and a comfortable lifestyle in your golden years. In Australia, the average retirement savings vary significantly depending on factors like age, gender, and lifestyle choices. This comprehensive guide delves into the intricacies of retirement planning in Australia, providing insights into the average retirement savings, key considerations, and strategies for building a robust retirement nest egg.

Understanding Retirement Savings in Australia

The average superannuation balance for Australians aged between 60 and 64 is $361,539, with a median figure of $183,524. This figure varies based on gender, with females holding an average superannuation balance of $318,203 and a median balance of $158,806, while males have an average balance of $402,838 and a median balance of $211,996.

Factors Influencing Retirement Savings

Several factors influence the amount Australians retire with, including:

  • Age: Younger Australians have less time to accumulate retirement savings compared to older individuals.
  • Gender: The gender pay gap contributes to lower superannuation balances for women.
  • Lifestyle Choices: Individuals with higher living expenses and a greater propensity to save tend to accumulate larger retirement savings.
  • Investment Returns: The performance of investments significantly impacts the growth of retirement savings.

Key Considerations for Retirement Planning

1. Retirement Goals: Determine your desired retirement lifestyle and estimate the associated expenses.

  • 2. Benchmark Retirement Age: Plan for the age at which you can afford to retire.
  • 3. Anticipated Expenses: Consider how your spending patterns might change in retirement.
  • 4. Retirement Income Needs: Calculate the amount of income required to fund your desired lifestyle.
  • 5. Additional Income Sources: Factor in potential income from sources like part-time work, rental properties, or investments.
  • 6. Investment Options: Choose suitable investment vehicles to generate income and grow your retirement savings.
  • 7. Start Saving Early: The earlier you start saving, the more time your savings have to grow.

Strategies for Building a Robust Retirement Nest Egg

  • Maximize Superannuation Contributions: Take advantage of employer contributions and consider making additional salary sacrifice contributions.
  • Invest Wisely: Diversify your investments across different asset classes to manage risk and maximize returns.
  • Seek Professional Advice: Consult a financial advisor for personalized guidance and investment strategies.
  • Review Your Plan Regularly: Regularly assess your retirement plan and make adjustments as needed.

Planning for retirement is essential for ensuring a comfortable and financially secure future. By understanding the average retirement savings in Australia, considering key factors, and implementing effective strategies, you can build a robust retirement nest egg and enjoy a fulfilling post-work life. Remember, it’s never too early to start planning for your retirement.

Frequently Asked Questions

How much super do I need to retire at 60 in Australia?

The amount of super needed to retire at 60 varies based on your desired lifestyle, expected living costs, and life expectancy. A standard benchmark is to multiply your annual post-tax retirement expenses by 15 to 25 times. For example, if you need $50,000 annually, you might need between $750,000 and $1,250,000 in super and other income-generating assets.

How long will $3 million last in retirement?

Assuming a moderate withdrawal strategy of 4% annually, adjusted for inflation, $3 million could provide an annual income of $120,000 before taxes. This approach, known as the ‘4% rule,’ aims to make your savings last for at least 30 years, accommodating a retirement lifestyle exceeding average living costs.

What type of safety net will be in place if I don’t make a plan?

Most workers have some superannuation to rely on when they reach preservation age. The government age pension is also available to those who meet the income and asset tests. However, the pension amount is relatively low, highlighting the importance of retirement planning.

Additional Resources

Disclaimer: This guide provides general information and should not be considered financial advice. It’s essential to seek personalized advice from a qualified financial advisor before making any investment decisions.

Reason ceased last job

The top three reasons retirees left their last employment in 2020–21 were:

  • Reached retirement age or eligible for superannuation (28%)
  • Own sickness, injury or disability (13%)
  • Retrenched, dismissed or no work available (7%).

Women in retirement were more likely than men to have left their last job to care for an ill, disabled, or elderly person (4% compared to 2%).

Between 2018-19 and 2020-21:

  • For most retirees, the government pension continued to be their primary source of income.
  • Superannuation was a more common source of income for retirees, but the increase was higher for men than for women.
  • The percentage of retirees without personal income decreased to approximately 2019% for women and 3% for men.

In 2020-21:

  • 34% of retired women relied on their partner’s E2%80%99 income to cover their living expenses in retirement, whereas only 7% of retired men did the same.
  • The primary determinant of retirement age for individuals planning to retire was their level of financial security.
Proportion of retirees
2018-19 2020-21 Change
Retired men aged 45 years and over
All sources of income included:
Government pension 53% 53% No Change
Superannuation 49% 51% +2 pts
Main source of income
Government pension 49% 44% -5 pts
Superannuation 31% 35% +4 pts
No personal income 6% 3% -3 pts
Retired women aged 45 years and over
All sources of income included:
Government pension 45% 46% +1 pt
Superannuation 27% 29% +2 pts
Main source of income
Government pension 44% 42% -1 pts
Superannuation 18% 19% No change
No personal income 29% 19% -10 pts

Note: All forms of government allowances are included in government pensions, and all annuities and allocated pensions are included in superannuation.

The percentage of participants in superannuation schemes reporting receiving a lump sum payment rose from 540,000 to 870,000 between 2018–19 and 2020–21. Those who had not yet retired accounted for the majority of this increase, which doubled from 270,000 in 2018–19 to 560,000 in 2020–21. This increase was due to the early release of superannuation during the COVID-19 pandemic, which permitted individuals experiencing financial hardship to access up to $20,000 before retirement.

Tasmania had the highest proportion of retirees (48. 5% of population aged 45 years and over).

Between 2018-19 and 2020-21:

  • Queensland had the greatest increase in retirees (+76,000)
  • Australia’s Capital Territory experienced the greatest percentage increase in the percentage of retirees (32% to 97%).
  • Victoria experienced the biggest drop in the percentage of retirees (40% to 39%).
People aged 45 years and over
Retirees Proportion retired Change in proportion since 2018-19
New South Wales 1.3 million 41% No Change
Victoria 1.0 million 39% -1 pt
Queensland 830,000 40% +1 pt
South Australia 350,000 45% No Change
Western Australia 390,000 37% +3 pts
Tasmania 120,000 48% +1 pt
Northern Territory 16,000 23% +4 pts
Aust. Capital Territory 57,000 37% +4 pts

Average Super Balance By Age 2023 (Official Statistics)

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