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How Does Your Super Compare to Others?

June 13, 2024
Read Time:
4 mins
Author:
Inovayt

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Despite comparison being the thief of joy, sometimes it’s beneficial to compare your superannuation to industry standards to ensure you’re on track for a comfortable retirement. 

While everyone’s idea of what a comfortable retirement looks like varies, you should ensure your super is performing and working towards helping you achieve your overall goals.    

In this blog, we explore how your super might compare to others and what you can do if you feel like your superannuation isn’t where you want it to be. 

To learn more about the basics of superannuation, click here. 

What is the retirement age in Australia?

You can retire at any age you choose. However, to be eligible for an aged pension there are official age requirements. This varies depending on when you were born. 

The Department of Social Services website lists the following breakdown:

How much super do I need to retire comfortably?

According to the Association of Super Funds Australia (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

While this is an average, these figures assume that the individual/s:

  • Have paid off and own a home 
  • They rely on a partial pension 
  • They withdraw their super as a lump sum 

Then there is the question of what comfort looks like. 

This varies significantly for everyone. If you plan to travel, buy household goods, or embrace frequent recreational activities you may need more than the average to ensure you can live the life you desire without financial strain. 

Your ideal balance may also vary depending on where you live. The cost of living varies from state to state and from metro to regional and rural. 

What should my super balance be?  

For a comfortable retirement, ASFA recommends the following estimated super balances needed at particular ages. 

 

Age Balance for a comfortable retirement
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

Source: *Estimated balance via ASFA Super Balance Detective calculator

Why is my balance less than what’s recommended for my age?

If your superannuation balance doesn’t stack up to the figures above, don’t panic. 

There may be several reasons why your super balance is less than the recommended amount. Research shows that both men and women are typically behind when it comes to reaching a comfortable amount for their retirement. 

To figure out why your balance is less, ask yourself the following questions:

  • Does your fund provide you with value for money? Start by looking at the fees associated and how much control you have.
  • Are you investing in the correct option? These will vary with age, the approach should be more conservative as you near retirement. 
  • Are you paying for the right insurance? This should consider your individual circumstances and should be reviewed semi-regularly.

It’s worth noting, women often have less in their superannuation accounts due in part to disproportionate career breaks to raise children. Additionally, women are more likely to work in industries that attract lower salaries that ultimately impact their super balance. 

Self-employed individuals may also find they have less super if they haven’t been as diligent in paying their super in comparison to if they had been employed elsewhere. 

Lastly, during the first year of COVID, Aussies that faced a 20 per cent decline in working hours were unemployed, or were on benefits, were permitted to take out up to $20,000 of their superannuation. Five million people took up this offer to cover their immediate expenses. This equated to $36 billion

While this move may have potentially helped some people cover their immediate expenses, more than half of the individuals who took up this offer were under 35 and may now find themselves in a position where they have substantially less when it comes to retirement.   

How can I grow my super?

The sooner you increase your super the better off you will be as you’ll have compound interest on your side. 

There are a few steps you can take to improve your super balance, including:

  • Check for lost super: There are currently 6 million inactive super accounts in Australia equating to an estimated $20 billion in unclaimed super. It’s worth looking to see if one of those lost accounts is yours. 
  • Salary sacrifice: You can make regular additional contributions through salary sacrificing. 
  • Spouse contributions: Your spouse may also contribute to your super – this may be something that could be arranged if one partner takes parental leave. 
  • Regularly check your fund’s performance: Just like you would with any other finance product, make sure your super is performing, that the fees are reasonable, and you have the correct level of insurance for your needs. If you’re unsure if your super is right for you, the Inovayt team can support you. 
  • After-tax personal contributions: If you are a low or middle-income earner and make personal after-tax contributions to your super, the government may make additional contributions up to the maximum of $500.
  • Consolidate: If you have more than one superannuation account, consolidate! Avoid paying double the service fees and integrate your existing super accounts into one. 

Can an Inovayt financial advisor help me manage my super?

Comparing your super to industry standards can be a valuable exercise to ensure you’re on the right path to a comfortable retirement. By understanding how much you need, why you might be behind, and how to grow your super, you can take proactive steps toward securing your financial future. 

The team at Inovayt is here to help you navigate the complexities of superannuation and support you in achieving your retirement goals. Get in touch today. 

Have questions about your super? Reach out today

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Start your journey, contact Inovayt today

Start your journey, contact Inovayt today

Start your journey, contact Inovayt today

Start your journey, contact Inovayt today