Here’s How Much the Average Retiree in Australia has in Savings
Written by
Sean Fisher, AI Editor
Edited by
Sean Fisher
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Retirement is a significant milestone, often viewed as a reward for decades of hard work. However, ensuring a comfortable retirement requires careful planning and saving throughout one’s working life. In Australia, the average retiree’s savings primarily come from their superannuation, a compulsory system designed to help Australians build a nest egg for their post-work years. But how much do Australians typically have saved by the time they retire? Let’s delve into the details.
Understanding Superannuation and Retirement Savings
Superannuation, or super, is the cornerstone of retirement savings in Australia. The government mandates that employers contribute a percentage of an employee’s earnings to a super fund, which is currently set at 11% and will gradually increase to 12% by July 2025. This compulsory system is designed to ensure that Australians have a substantial amount saved by the time they reach retirement age.
Average Super Balances by Age and Gender
Data from the Australian Taxation Office (ATO) reveals significant differences in super balances across various age groups and between genders. Here’s a breakdown of the average super balances for men and women as of the 2021 financial year:
| Age Group | Male Average Balance | Female Average Balance |
|---|---|---|
| 18-24 | $8,148 | $7,328 |
| 25-29 | $25,981 | $23,429 |
| 30-34 | $56,344 | $46,289 |
| 35-39 | $95,937 | $75,785 |
| 40-44 | $139,431 | $107,538 |
| 45-49 | $190,716 | $142,037 |
| 50-54 | $246,955 | $182,167 |
| 55-59 | $316,457 | $236,530 |
| 60-64 | $402,838 | $318,203 |
| 65-69 | $453,075 | $403,038 |
As shown, there is a noticeable gap between the average balances of men and women, which can be attributed to factors such as career breaks for childcare, part-time work, and the gender pay gap.
How Much Super Do You Need to Retire Comfortably?
The Association of Superannuation Funds of Australia (ASFA) provides guidelines on the super balances needed for a comfortable retirement. According to ASFA, the average super balance needed at age 67 for a comfortable retirement is:
- $690,000 for a couple
- $595,000 for a single person
These figures assume that retirees withdraw their super as a lump sum, rely on a part-pension, and own their home outright. A “comfortable” retirement, as defined by ASFA, includes affording a range of recreational activities, purchasing household goods, and having private health insurance, a reasonable car, good clothes, and occasional travel.
How Do Your Savings Compare?
To gauge whether you are on track for a comfortable retirement, it’s useful to compare your super balance to these benchmarks. The ASFA Super Balance Detective calculator offers an estimated balance required at various ages to achieve a comfortable retirement:
| Age | Estimated Balance Needed |
|---|---|
| 23 | $5,500 |
| 25 | $18,500 |
| 30 | $59,000 |
| 35 | $101,500 |
| 40 | $156,000 |
| 45 | $213,000 |
| 50 | $281,000 |
| 55 | $361,000 |
| 60 | $453,000 |
| 65 | $549,000 |
| 67 | $584,000 |
Boosting Your Super Balance
If your super balance is falling short of these targets, there are several strategies you can employ to boost your savings:
- Check for Lost Super: Consolidate any super from previous jobs by logging into your myGov account and searching for lost super.
- Make Additional Contributions: Consider salary sacrificing or making after-tax contributions to your super fund.
- Utilize Spousal Contributions: If you’re married, your partner can contribute to your super, especially beneficial if they are a higher earner.
- Review Your Fund’s Health: Ensure your super fund provides value for money, with the right investment options and insurance coverage for your needs.
- Leverage Government Co-Contributions: If you’re a low- or middle-income earner, take advantage of government co-contributions by making personal contributions to your super.
Conclusion
Retirement planning is crucial to ensure you can enjoy your post-work years without financial stress. While the average retiree’s super balance in Australia varies, aiming for the ASFA’s guidelines can provide a solid foundation for a comfortable retirement. Regularly reviewing your super, making additional contributions, and leveraging available resources can help you build a more secure financial future.
Taking proactive steps now will pay off in the long run, ensuring that you can enjoy your retirement years to the fullest.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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