If you are wondering how much super should I have at my age, comparing your super balance to other Australians your age will help find the answer.
Below you will find out exactly how much similar-aged Aussies have saved up, so you can see if you are on track towards funding the lifestyle you want when you retire.
How Much Should I Have In My Super by the Time I Reach Retirement
Superannuation is a retirement fund in which employers contribute 10% of your salary. Even though it is not the only way to save for retirement, a super fund has tons of benefits, from insurance coverage to investment possibilities.
Not Satisfied with yoursuper?let’s get you a better option!
For more on super funds and how they differ from the US retirement scheme, go to this guide.
However, when it comes to how much super is enough to live comfortably after leaving the workforce, there’s no one-size-fits-all answer. The amount you need for retirement depends on your individual circumstances, lifestyle choices, and spending habits. For instance, if you want to retire earlier or live a more luxurious lifestyle in retirement, you may need more than the average.
On the other hand, if you’re willing to downgrade your lifestyle or retire later, you may be able to get by with less.
Average Super Balance by Age
One way to check if you have enough in your super for a carefree retirement (at least in terms of finances) is to check how much other people your age have saved so far.
(source: Australian Bureau of Statistics)
According to the ABS, people in their late 40s and 50s have saved up the most in their super accounts.
The gap in super balances between genders is also quite evident. Women have fewer superannuation balances than men, mostly due to the high gender pay gap that exists in Australia.
Women are also more likely to work casually or part-time than men and take more breaks during their career—the latest stats show that 88% of primary carer’s leave in Australia is taken by women. Finally, female-dominated industries, such as Health Care & Social Assistance and Education & Training, tend to offer lower wages.
How Much Super Should I Have at My Age?
Another way to check if your super balance is on the right track is to see how much you should have in your account at your age to be able to live comfortably at 67 (according to ASFA Comfortable Standard).
Note: These numbers are just estimates. The actual answer to questions like ‘how much super should I have at 40’ or ‘how much super should I have at 30’ depend on several factors, such as income, health expenses, and lifestyle needs and requirements.
How Much Super Do I Need?
Generally speaking, it’s recommended that you aim to have enough super to cover around 70% of your pre-retirement income. So, if you’re currently earning $50,000 per year, you would need around $35,000-$40,000 annually in retirement (excluding the Age pension).
According to ASFA though, to be able to enjoy a comfortable retirement, you would need between $45,962 (for singles over 65 without a mortgage) and $64,771 (for couples).
Annual Budget for Single Retirees
ASFA estimates that single retirees spend about $45,962 annually (for pensioners aged around 67) and $43,193 (for pensioners around 85). This sum covers retirees’ living expenses, groceries, health checks, and domestic travelling annually.
If you plan on leading a modest lifestyle after leaving the workforce, the annual sum drops down to $29,139 and $27,286, for those aged 67 and 85, respectively. This amount is a basic package, just enough to cover living expenses, groceries, and health check-ups.
How much is the average grocery bill in Australia in 2022? Here are some insightful stats and facts on the average cost of food.
Annual Budget for Couple Retirees
Couple retirees are expected to spend around $64,771 per year if both spouses are around 67 or $59,837 if they are about 85 years of age. This will cover occasional trips, regular socialisation, and restaurant dinners.
Depending on the retiree’s age, more or less of the super will go to health insurance and regular check-ups. Older retirees tend to spend more money on health insurance. Actually, the rate of private insurance coverage is the highest among people aged between 65 and 69.
As with singles, couples looking to have a more modest lifestyle can expect to spend less or between $41,929 and $38,997.
It’s important to remember though that these figures are based on the assumption that pensioners own their homes and are in good health. On top of that, not everyone relies on super alone to cover living expenses in retirement. In fact, for 50% of retirees in Australia, the government pension is the primary source of income.
Is Your Super Balance Lower Than the Average?
If your account balance falls short of the average for your age, you should consider growing your super.
At the moment, 10% of your gross salary goes to your super account (10.5% as of July 2022). However, there are ways to boost your super balance in addition to compulsory contributions.
How to grow super?
Here are 4 ways to boost your super:
- Combine super accounts
Consolidating your super accounts (if you have more than one) will ensure that you pay less in fees to multiple super funds.
It will also allow you to have more control over your accounts and make it easier to track contributions and contribution caps. Best of all, combining super accounts will give you the chance to stick with an investment strategy that is best suited to your risk appetite and retirement goals.
Still, it’s worth taking the time to research if this is the right choice for you. By consolidating funds you might lose insurance or benefits granted by the other accounts.
If you are interested in lower-risk investment schemes that are suited to beginners, take a look at:
- Index funds
- Managed funds
Note: If you have lost track of your super accounts, you can use the Unique Superannuation Identifier number to find your unclaimed super.
- Salary sacrifice scheme
As the name suggests, this scheme allows you to ‘sacrifice’ part of your before-tax salary into your super account. This is on top of what your employer already pays into your super under the super guarantee.
A salary sacrifice scheme means that you are getting paid less (i.e. your take-home salary will be lower), however, you will end up paying less tax on these contributions than you would on your entire taxable income.
For 10 more ways to save on tax, read this helpful article.
- Make extra contributions
You could also make extra, voluntary contributions to your super.
- Downsizer contributions
If eligible, you could use the money from the sale of a qualifying property to make an after-tax downsizer contribution to your super of up to $300,000.
- Tax-deductible contributions
These are voluntary contributions that you can make with after-tax dollars. For instance, you could withdraw money from your account and put it in your super, and after that, you can claim a tax deduction for it.
Note: Some contributions are capped, so make sure to do research and see if voluntary contributions to super are right for you.
- Spouse contributions
Australians can make a contribution to the super account of their spouse. This will help grow their balance as well as help you save on tax. What’s more, if your partner is a low-income earner, you might be able to claim a tax offset of 18% on up to $3,000 via your tax return.
You might be interested: What is a tax offset and how does it work?
- Government co-contributions
If eligible, you could get a government co-contribution of up to $500 to your super. This contribution is tax-free, so you won’t pay any tax when the money is deposited or withdrawn from your super fund.
- Check up on your super fund
Take a closer look at your super fund and how it is performing. If you are paying too much in fees or your fund does not provide adequate insurance cover, you might want to change super funds.
Is Your Super Balance on Track?
Even if your super balance is close to that of your peers or above the average for your age and gender, you should still think about giving it a boost.
You are never too young or too old to start planning your retirement. The sooner you begin putting money away for your retirement, the more you will have when the time comes to hang up your work boots.
What’s more, with super, even small contributions can add up over time, especially if they are made regularly, which once again highlights the importance of starting to think about retirement planning as early as possible.
1. How much super do I need to retire at 60?
Employees in Australia can decide for themselves when they want to leave work for good or cut back their working hours. That said, even if you retire early, you cannot access your super until the age of 65, with some exceptions:
- Being over preservation age (depending on your birth year);
- Financial hardship (due to COVID-19, or other valid reasons);
- Certain medical conditions.
2. How much do I need to retire on $100000 a year in Australia?
This depends primarily on when you retire, whether you are single or married and whether or not you want to factor in the Age Pension. It also depends on how much you have saved up in your super so far and your age.
3. How much should a 40-year-old have in super?
It is estimated that you should have $154.000 in your super in your forties if you want more than a modest retirement. Don’t overstress if you’re not near that sum. You have plenty of time ahead of you, and there are different ways to grow your super funds.
4. How much should a 32-year-old have in super?
By the age of thirty, most employees have been working for around ten years and should be saving up for retirement. Keep in mind that the average 32-year-old male has $42,100 in their super, while women have $34,500. So, if you are in your thirties and wondering how much super should I have by now, the average super balance account for your age and gender should be a good indicator.
