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Everyone likes to know how their financial position compares to others of the same age. It’s no different when it comes to your super account.
But how can you find out how you compare with your peers and whether you are on track – or behind the pack?
To make things easy, SuperGuide has pulled together the latest statistics so you can rate your performance and work out if you need to take some action.
How the balance of your super account compares
One of the most reliable ways to find out what’s going on in other people’s super accounts is to check the superannuation data released by the Australian Bureau of Statistics (ABS).
Latest statistics for super accounts
– 1 in 3 women have no super account
– 1 in 4 men have no super account
– 25% of women aged 60–64 are retiring with no super
– 13% of men aged 60–64 are retiring with no super
– $122,848 is the median super balance for females retiring aged 60–64
– $154,453 is the median super balance for males retiring aged 60–64
Source: ASFA Better Retirement Outcomes: A snapshot of account balances in Australia, July 2019
According to the latest ABS statistics, in 2017/18 the average super account balance for people aged 15 and over was $168,500 for men and $121,300 for women. In 2015/16, the average super account balance was $158,700 for men and $105,400 for women.
The Association of Superannuation Funds of Australia (ASFA) has also calculated the average super account balance in different states and territories. It found ACT ($186,743), Victoria ($142,412) and NSW ($133,643) have average balances above the national average of $132,646. The average balance is lower in South Australia ($131,914), Tasmania ($126,348), Queensland ($123,636), WA ($119,980) and the Northern Territory ($95,170).
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Although these average super account balances are interesting to know, it’s a lot more useful to find out how much people of a similar age to you currently have in their super account.
If you look closely at the average super balances for different age groups, you get a much clearer picture of where your super savings sit in comparison to your peers.
Average super account balance for Australians in different age groups during 2017/18
|75 and over||$366,200||$270,300||$317,600|
Super account balances: How they change over time
The ABS statistics show for both men and women the average balance of your super account is likely to increase steadily as you get older. This continues until well into retirement.
Aussies aged over 55 tend to have a higher super balance. This is largely due to additional pre-retirement contributions. The super accounts of pre-retirees have also had a longer period to enjoy the benefits of compounding. To learn more, see SuperGuide article The magic of compounding interest.
Once you reach age 75, however, you have usually started drawing down on your super account and have stopped making contributions, so your super account starts to decline.
On average, women still have lower super balances than men, but the difference is reducing. In 2017/18, only 69.5% of women reported to the ABS that they had a super account, compared to 74.4% of men. The percentage for women aged 65 and over was much lower, with only 40% reporting they had a super account. This compared to 51.3% of men aged 65 and older.
To learn more, see SuperGuide article Superannuation for the self-employed.
What retirement lifestyle will your account balance provide?
Just as everyone has a different super account balance, everyone has a different idea of how much money they will need for a comfortable retirement.
To find out approximately how much retirement income the savings in your super account might be able to generate, check out SuperGuide’s Super to income reckoner.
But if you want to know what retirement lifestyle your current super account balance is likely to deliver compared to other retirees, a good place to start is the ASFA Retirement Standard. This benchmark is updated quarterly and is used throughout the super and retirement industry as a starting point for retirement planning.
Need to know
The ASFA Retirement Standard assumes you own your own home outright and are in relatively good health.
In 2018, ASFA calculated how big the super lump sum both a single person and a couple required to generate sufficient income to enjoy either a ‘comfortable’ or a ‘modest’ lifestyle in their retirement:
Super savings required at retirement
Comfortable lifestyle – Couple
Comfortable lifestyle – Single
Modest lifestyle – Couple
Modest lifestyle – Single
* All figures in 2018 dollars using 2.75% AWE as deflator and assumed investment earning rate of 6%.
The $70,000 lump sum needed for a modest lifestyle is relatively low as the Age Pension and pension supplements are sufficient to meet much of the expenditure required for this lifestyle.
A comfortable retirement requires a larger balance in your super account. If you want to be able to take domestic holidays and the occasional overseas holiday, go to restaurants and enjoy a good range and quality of food and take part in a range of regular leisure activities, you will need to ensure you have this sort of balance in your super account.
Good to know
ASFA estimates the percentage of Australians who are self-funded at retirement age will rise from 22% in 2000 to 43% in 2023.
Behind the average super balance for your age? Five action steps to consider
- Check for any lost super – Ensure you don’t have super savings sitting in an account you’ve forgotten.
- Consider consolidating multiple super accounts – Combining super accounts could save fees and charges, but check for any exit fees. And ensure you won’t lose valuable insurance protection.
- Review your investment option – Think about switching to a more growth focused investment option, but remember this usually comes with more investment risk.
- Consider making additional contributions – Personal tax-deductible contributions add to the balance in your super account and could cut your annual tax bill. Non-concessional (after-tax) contributions can also be used to boost your super account.
- Ask your employer about a salary sacrifice arrangement – Adding extra cash into your super account from your before-tax salary will increase your super balance and is usually taxed at a lower rate than your marginal tax rate.