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Want to gain confidence that retirement savings measure up? See the average super balances for Australians at different ages and compare how an individual is progressing towards retirement.
COVID-19 has contributed to global financial volatility and may have impacted the ongoing financial wellbeing of some people.
It is arguably more important than ever before for people to be familiar with their super balance and what they may need for retirement, particularly for those who accessed their super early during COVID-19.
The Association of Superannuation Funds of Australia (ASFA) has created a Retirement Standard to help give people a clearer understanding of what retirement lifestyle their savings will give them.
It is updated quarterly to reflect inflation and provides detailed budgets of what singles and couples would need to spend to support their chosen lifestyle.
For a ‘comfortable’ retirement, ASFA’s September quarter 2020 estimates, which include COVID-19 impacts on Australia’s financial and economic conditions, indicate that single people will need $43,901 in retirement savings per year, and couples will need about $62,083 per year.1
To retire modestly, the ASFA September 2020 report estimates that single people aged about 65 will need about $27,987 a year and couples will need about $40,440, per year.
To achieve a comfortable retirement, ASFA calculates the amount of savings required by retirement are around $640,000 for a couple, and $545,000 for a single person.
The Australian Bureau of Statistics (ABS) has published the average superannuation balances of Australians across age brackets.2
This is one guide for individuals to see how their balance compares.
Here’s the average super account balance for Australians at each age from ABS:
Source: Australian Bureau of Statistics, Gender Indicators Australia 2020, accessed 20 December 2020.
While it's helpful to see how average super balances compare, it's important to remember that many Australians' super balances are falling behind what they should be.
Websites like Super Guru show the estimated super balance a person should have at each age to achieve the savings required for a comfortable retirement.
Here's the super balance to aim for at each age:3
Source: Super Guru, Super Balance Detective, accessed 10 January 2021. Please refer to this website for full details on the Super Guru methodology.
If your employees’ super balances are falling short of their expectations, there are still plenty of actions they can take that may help grow their super for retirement.
One effective action that could be taken is to consolidate super accounts.4
Finding and consolidating lost super into one account could save money on fees and help a person’s retirement funds grow.
Consolidating super can be easy to do in just a few minutes. It can be completed easily online through the Australian Taxation Office (ATO) by following these steps:
Go to my.gov.au
Log in or create an account
Link your myGov account to the ATO
Select 'Super' and then 'Manage'
Select 'Transfer super' (this option will only appear if you have more than one super account).
Alternatively, QSuper can help members consolidate. Simply provide us with the details of your other super fund/s either through Member Online or by completing the Consolidate with QSuper form and we will do the rest.
Other effective measures to help grow super balances may include:
Paying money into your super from before-tax salary may mean less income tax while you grow your retirement savings.
Even small amounts from your after-tax pay each week or month may make a big difference to your savings, and they may be eligible for a tax deduction.
Contributing to a spouse’s super could attract a tax offset of up to $540.(Eligibility and conditions apply)
QSuper’s Finfit program may help you understand more about financial wellbeing including the basics of superannuation.
1. Media Release, 23 November 2020, Cost of retirement up in the September quarter despite partial return to pre-COVID prices, Association of Superannuation Funds of Australia at https://www.superannuation.asn.au/media/media-releases/2020/media-release-23-november-2020
2. Australian Bureau of Statistics, 15 December 2020, Gender Indicators, Australia, December 2020, Table 2:7 Superannuation balance at, or approaching preservation age, by age and by relationship in the household to 2017—2018, at https://www.abs.gov.au/statistics/people/people-and-communities/gender-indicators-australia/latest-release#data-download.
3. Figures are calculated using the Super Guru Super Balance Detective calculator. Accessed 10 January 2021.
4. Before consolidating your super, you should check with your other super funds if there are any fees or tax implications, or loss of insurance or other benefits.
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