It's likely that most Australians regard superannuation and their respective super funds as important. After all, it's always in the media, and talk about its importance to a comfortable retirement is easy to find. Plus, we often hear about superannuation policy every time there is a budget or an election.
However, superannuation is probably vastly underestimated as a pillar of every Australian's personal wealth. When you think about it, it's not such a stretch though. After all, 11% of most Australian's take-home pay immediately goes into our super funds. That adds up after a while, particularly given this money is typically invested in growth assets like bonds and ASX shares.
But just how important is super to our wealth? It's a good question to ask, given many, if not most, Australians would be able to tell you the value of all of the cash and assets they own – but not the value of their superannuation account.
Well, who better to get an answer to this question from than the Australian Bureau of Statistics (ABS)? The ABS has just released the latest estimates of household wealth in Australia, taken over the quarter ending 31 December 2023.
How much wealth comes from superannuation in Australia?
It makes for some interesting reading. The report found that household wealth in Australia rose over the quarter by 2.8%, or $419 billion, to $15.7 trillion. It was the fifth quarter in a row that saw an increase in household wealth, which, as of 31 December, stands 7.8% higher than where it was 12 months prior.
Residential land and dwellings were the largest factor in this quarterly rise. But the rise of share markets, both the ASX and internationally, helped too. The report found that rising share prices and dividend income saw "households' direct ownership of shares and other equity" increase by 3.8%, or $51.8 billion.
However, superannuation assets benefitted from the same trends, rising 3.9%. That added a whopping $140.1 billion to household wealth over the quarter.
So out of the $419 billion in increased wealth Australian households enjoyed over the three months to December, $140.1 billion (or just over a third) came from superannuation.
To be fair, the ASX, as well as other international markets, have enjoyed an exceptionally strong and usually high, level of growth over the past five or six months. So this is probably an outsized result for super and its contribution to overall household wealth.
But even so, no one can deny how important superannuation is to Australia after looking at these numbers. Might be time for a super checkup?
