The average Australian's superannuation balance leaves much to be desired for one seeking a comfortable retirement. Fortunately, there's a solution.
Let's dive into what anyone hoping to enter retirement without a large super balance can do to financially prepare.
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Most Aussies don't have enough super for a comfortable retirement
The Australian superannuation system is a complex one designed to see Australians funding their lifestyle through their retirement years, perhaps with a little help from the Age Pension.
The compulsory superannuation guarantee – ensuring employees receive a minimum super contribution – has been around for more than three decades.
Yet, the average Australian in their early 60s doesn't have a super balance large enough to fund a comfortable retirement – and they're worried about it.
That's according to new research from YouGov, commissioned by financial advisory and account service provider Findex.
Only 5% of Baby Boomers and just 17% of Gen Xs are confident they have the resources, including superannuation, to see out their retirement, it found.
So, how much does one need to retire in comfort? If you're single, you'll need more than $500,000, assuming you own your own home, according to the Association of Superannuation Funds of Australia Retirement Standard.
That figure is worryingly higher than the average super balance.
Aussie men in their early 60s have an average super balance of slightly under $356,000. Women are even worse off, with an average of just under $288,000 in super.
Findex co-CEO Matt Games commented on those concerning figures, saying:
This paints the picture that most Aussies have adopted a 'kick it down the road' mentality to retirement. But when the time eventually comes, they're faced with the reality that their existing savings and superannuation balance are insufficient in this economic climate.
Meanwhile, one in two Australians feel they don't have a strong understanding of the resources needed to retire.
If that sounds like you, you might find comfort in The Motley Fool Australia's all-encompassing guide on retirement and maintaining a relaxed living standard through your second life.
Financial advice touted as worthwhile for all
Seeking out financial advice can also help ease the minds – and increase the wealth – of those among the majority.
Games said:
The time to access advice is now … it's never too late for someone to benefit from advice even if you're less than ten years away from retirement.
Findex head of investment relations Matthew Swieconek continues:
A financial adviser doesn't only provide guidance on investment strategies that align with your goals and risk tolerance. They provide behavioural coaching, asset allocation research and management and tax savvy planning – areas that DIY investors can often overlook and can add enormous value to wealth creation over time.
Quantifying this, our projections demonstrate the value of advice where Aussies stand to gain 8% to 29% in benefits depending on the age they start.
