A Guide to Average Superannuation Balances
Superannuation is a critical part of retirement planning, yet many Australians find themselves wondering how their balance compares to others and whether they’re on track to retire comfortably. Understanding how much super you should have at different stages of life can help you make informed decisions and improve your financial future.
In this article, we’ll delve into average super balances by age, what you should aim for, and strategies to boost your retirement savings.
How Much Super Should You Have?
The amount of superannuation you should have depends on a variety of factors, including your age, income, lifestyle goals, and retirement plans. Super balances grow through:
- Employer Contributions: The current Superannuation Guarantee (SG) rate is 11.5% of your salary, which your employer must contribute.
- Voluntary Contributions: Additional contributions, such as salary sacrifice or after-tax payments, can significantly increase your balance.
- Investment Growth: Your super fund invests your contributions, and the returns add to your balance over time.
- Fees: Administration and management fees are deducted, impacting your overall growth.
Average Super Balance by Age
To understand where you stand, compare your super balance with the average figures provided by the Australian Bureau of Statistics and AFSA Research and Resource Centre.
Age Group | Male Average Super | Female Average Super |
|---|---|---|
Under 18 | $11,710 | $7,455 |
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 |
70–74 | $509,059 | $451,523 |
These figures highlight a gender gap, with women typically having lower super balances due to factors such as career breaks and part-time work.
How Much Super Should You Have at Your Age?
While comparing your super to averages can be useful, it’s more important to focus on whether your balance aligns with your retirement goals. Here’s a closer look at each decade:
In Your 20s
Most 20-somethings are just starting their careers, so their balances may be relatively low. The focus should be on consolidating multiple super accounts and ensuring employer contributions are being made.
In Your 30s
By your 30s, your super should start to grow more significantly through consistent contributions and investment returns. Voluntary contributions can help set a strong foundation for retirement.
In Your 40s
This is a critical period for building your super. Many people are in their peak earning years, so salary sacrificing or making personal contributions can make a big impact.
In Your 50s
With retirement on the horizon, it’s time to review your super strategy. Maximize contributions, take advantage of tax concessions, and review your investment mix to balance growth and risk.
In Your 60s and Beyond
Consider converting your super into an income stream as you transition into retirement. Strategies such as Transition to Retirement (TTR) pensions can provide income flexibility while minimising tax.
How Much Super Do You Need to Retire?
The Association of Superannuation Funds of Australia (ASFA) defines a “comfortable retirement” as requiring $690,000 for couples and $595,000 for singles. This assumes an annual income of $72,663 for couples and $51,630 for singles, covering:
- Leisure activities
- Private health insurance
- Domestic and international travel
- A reasonable car and electronic equipment
If your super balance falls short, you may need to rely on the Age Pension or other savings to bridge the gap.
How to Boost Your Superannuation
If your super balance isn’t where you’d like it to be, there are several strategies to improve it:
- Salary Sacrifice Contributions
Direct a portion of your pre-tax salary into your super to reduce taxable income and boost savings. - Government Co-Contributions
Low- and middle-income earners may qualify for a government contribution of up to $500 by making after-tax contributions. - Consolidate Your Super Accounts
Reduce fees by merging multiple accounts into one. - Check Your Fund’s Fees and Performance
Compare your super fund’s fees and returns with others to ensure you’re getting the best value. - Review Insurance in Super
Ensure any insurance policies within your super align with your needs, as premiums can erode your balance.
Gender Gap in Super
Women tend to retire with lower super balances due to various systemic factors. To address this, women can:
- Make additional contributions during high-earning years.
- Take advantage of spouse contributions or government incentives.
- Review their super strategy regularly, particularly after career breaks.
The Importance of Financial Advice
Understanding how much super you need and how to achieve your goals can be complex. Engaging a financial planner can provide personalized strategies to:
- Maximize your contributions.
- Optimize investment returns.
- Create a clear retirement plan.
At Point B Planning, we specialize in helping Australians prepare for a comfortable retirement by optimising their superannuation and overall financial position.
Superannuation is a powerful tool for ensuring financial security in retirement. By understanding where you stand, setting clear goals, and taking proactive steps to boost your super, you can achieve the retirement lifestyle you envision.
For tailored advice and strategies to grow your super, contact Point B Planning today. Let us help you take control of your financial future.
