Key takeaways
It's important to know how much is in your superannuation, and whether you're on track to achieve a comfortable retirement.
Australians can retire at any age, but to qualify for an aged pension you need to be 67 years old. There are different rates of Age Pension payments for single and partnered people.
According to the Association of Super Funds Australia, an average single person will need $595,000 in their superannuation, and a couple needs $690,000 to live a comfortable retirement.
Regularly reviewing your superannuation fund can make a big difference to the final amount you have when you retire. Get some financial advice on making your super work harder for you.
Investing in other asset classes will not turbocharge your super balance, but it will ensure you have enough money to live a comfortable retirement when the time comes. Get professional advice.
Whatever age you are or the point of your career you’re at, it’s important to know how much is in your superannuation.
After all, the more you can contribute to your superannuation, the more you will have for retirement.
It’s also interesting, then, to see how your superannuation balance compares to others your age and whether you're on track to achieve a comfortable retirement.
Perhaps you’re on track with everyone else, perhaps you’re ahead, or perhaps you need to turbocharge your balance.
How much is the pension in Australia?
Australians can retire at any age, but to qualify for an aged pension you need to be 67 years old (unless you’re born before 1957, in which case you can retire at 65.5-66 years old and still qualify).
There are different rates of Age Pension payments for single and partnered people. If you have a partner we need to pass an income and asset test.
And if you get employment income, this may affect your rate of Age Pension.
The Department of Social Services regularly reviews the Pension Rates to reflect changes in the Consumer Price Index.
The amounts below are the maximum rates each fortnight according to Services Australia.
As you can see, the pension will not enable you to have a reasonable standard of living.
Normal Pension Rates per fortnight
| Per fortnight | Single | Couple each | Couple combined | Couple apart due to ill health |
|---|---|---|---|---|
| Maximum basic rate | $1,020.60 | $769.30 | $1,538.60 | $1,020.60 |
| Maximum Pension Supplement | $81.60 | $61.50 | $123.00 | $81.60 |
| Energy Supplement | $14.10 | $10.60 | $21.20 | $14.10 |
| Total | $1,116.30 | $841.40 | $1,682.80 | $1,116.30 |
Source: Services Australia
How much super do I need to retire?
Because the pension doesn’t allow for a comfortable lifestyle in your golden years many Australians are hoping to use their superannuation in order to live a comfortable retirement.
According to the Association of Super Funds Australia (ASFA), the average single person will need $595,000 in their superannuation, and a couple needs $690,000 to be comfortable and able to take part in recreational activities and pay for bills and reasonable expenses, including occasional travel.
In my mind, this isn’t anywhere near enough, and of course, that’s why many Australians are turning to property investment or having a Self-Managed Superannuation Fund to secure their financial freedom.
Also.., it's important to note that these figures are based on the following assumptions:
- You withdraw your super as a lump sum
- You rely on a part-pension
- You own your home mortgage-free
How much super should I have at my age?
Using the following table as a guide, here’s how much you’ll need in your super at certain ages in order to reach the goal of a comfortable retirement.
| 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: ASFA Super Balance Detective calculator/ ABC.net
How does my super compare to everyone else?
If you're curious to know how your nest egg shapes up against others your age, here's the average super balance for men and women, according to the Australian Taxation Office's statistics from the 2021 financial year.
| Age bracket | Male average account balance | Female average account balance |
|---|---|---|
| 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 |
Source: Australian Taxation Office's statistics/ ABC.net
You’ll notice that there is a different figure amount for men and women, which is due to women having to take time out of the workforce to have and raise children.
This pushes them back from reaching their comfortable retirement target.
An average 40-year-old should have a superannuation balance of around $156,000, but the average male aged 40-44 has $139,431, a shortfall of $16,569 and the average female aged 40-44 has $107,538, an even larger shortfall of $48,462.
These differences only increase as we get older.
So, why is my balance lower than others my age?
There could be a number of reasons - it is largely due to your income, the performance of your fund, and your investment options all matter.
6 steps to increase your super balance
There are a few things you can do to increase your superannuation balance.
1. Check for lost super
First, check for lost super from a previous job (you can contact the ATO if you have lost or unpaid super).
2. Make more payments
Another way is to make additional payments through salary sacrificing or after-tax contributions.
You can also ask your partner to boost your super through splitting or spouse contributions.
3. See if the government will help
And if you're a low- or middle-income earner and make personal after-tax contributions to your super, the government may also make a co-contribution up to a maximum of $500.
4. Review your superannuation fund
Meanwhile, regularly giving your fund a "health check" to make sure you've got the right level of insurance and aren't paying too much in fees, is also beneficial for your balance.
Looking at how your super is invested regularly can make a big difference to the final amount you have when you retire.
Does your super’s asset allocation still fit with your risk profile?
Even a small increase in super contributions can have a big impact on the lifestyle you will enjoy in retirement, so get some financial advice on making your super work harder for you.
5. Get professional advice
It's hard enough for experts to know which are the best investments, so why would you choose to wade through the maze of information (and misinformation) all on your own?
Having an objective and professional third-party review to help you formulate your retirement plan makes logical sense.
6. Consider investments elsewhere
While investing your money in other asset classes won’t help to turbocharge your super balance, it is another way to ensure you have ‘enough’ money to live a comfortable retirement when the time comes.
Building a cash machine of assets during your working life could help see you through the golden years and building a substantial portfolio of investment-grade properties throughout your working life to set yourself up for a lucrative retirement rather than a lacklustre one.
But it’s not easy, which is why the point above - to get professional advice - is vital here.
Note: When it comes to retirement, most of the money you have available will be a combination of what you have earned, saved and created.
If you’re able to keep on top of your superannuation balance, add additional money and reach that retirement goal sum then you can be happy your retirement will be well-funded.
For the rest of us, the future looks a little more bleak.
And the key is to get on top of it as soon as you can.
And one of the best ways to build a (passive) income is to invest in property.
You see, most of the money you will have when you retire will be the capital growth of your assets - plain and simple.
Because becoming wealthy happens slowly for the vast majority of people.
In fact, financial success is about getting rich slowly.
Tips: Whether you want to have $3 million or $8 million in the bank when you stop working, you have to start investing today to give yourself the best chance of achieving that goal.
Time is of the essence in successful property investment.
And that means investing for tomorrow today – with or without children still under your roof.
