Are you contributing enough to superannuation for your income bracket?

Many Australians across income groups are boosting their super with personal contributions.

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As you plan for retirement, it's essential to ensure that your superannuation contributions align with your income bracket. Contributing enough to your super is vital for securing a comfortable retirement, but many Australians are unsure if they're doing enough.

In this article, we'll explore average super contributions and balances across income groups. Understanding where you stand in your income bracket can empower you to make informed decisions towards a financially secure retirement.

Average and median superannuation balances by income group

Let's begin by examining the superannuation balances of Australians across different income brackets. According to the Australian Taxation Office, here are the average and median super balances for FY21 and FY22 by income bracket:

Taxable incomeAverage balance
2020–21
Average balance
2021–22
Median balance
2020–21
Median balance
2021–22
$18,200 or less$200,833$161,473$31,237$21,374
$18,201 to $45,000$102,045$98,453$18,047$17,127
$45,001 to $180,000$153,187$142,818$77,930$70,374
$120,001 to $180,000$325,265$295,925$200,164$178,728
$180,001 or more$615,266$573,053$331,971$303,980
No income tax return$132,312$132,854$36,568$40,888
Total$170,191$164,126$59,883$57,912
  • Lower-income earners: For those making $18,200 or less, the average and median super balances dip noticeably. This change signals a need for extra support to help the lower-income group grow their retirement savings.
  • Steady despite challenges: Interestingly, individuals without a taxable income managed a slight increase in their average super balance. This resilience suggests various factors are at play, including possibly government co-contributions that helped buoy their savings.
  • Middle-income group: Those earning between $45,001 and $180,000 saw their super balances shrink a bit. Despite this, their continued accumulation of substantial savings points to the importance of regular contributions and the benefits they bring over time.
  • High earners: The top earners, those with incomes of $180,001 or more, experienced a decrease in their average balance but still maintained significant savings. This highlights how higher contribution limits and perhaps more aggressive investment strategies can pay off.

How much did Aussies contribute to super?

The ATO's FY22 data breaks down individuals' superannuation contributions by taxable income brackets. The original data is separated by gender, age, and income range, but I combined them to find subtotals and calculated averages for each income group.

Income rangeEmployerPersonalOtherTotal contribution
$18,200 or less$1,037$5,595$1,718$8,350
$18,201 to $45,000$3,070$2,890$480$6,440
$45,001 to $180,000$7,766$2,070$530$10,366
$120,001 to $180,000$13,842$4,083$1,288$19,213
$180,001 or more$19,103$9,284$1,918$30,306
No income tax return$4,757$4,044$2,171$10,972
The above averages calculated by Kate Lee using the ATO's FY22 data.

The ATO's FY22 data shows significant variation across different income brackets:

  • $18,200 or less: This group made total contributions averaging $8,350, with the majority coming from personal contributions of $5,595.
  • $18,201 to $45,000: Contributions totalled $6,440, with employer contributions of $3,070 being the largest component.
  • $45,001 to $120,000: Total contributions reached $10,366, predominantly from employer contributions amounting to $7,766.
  • $120,001 to $180,000: This income range had contributions of $19,213, with a substantial amount coming from employer contributions at $13,842.
  • $180,001 or more: Contributions were highest in this bracket, totalling $30,306. Employer contributions were again the largest part at $19,103.
  • No income tax return: This group made contributions totalling $10,972. However, this group has a more balanced distribution among employer, personal, and other contributions.

This data highlights that higher income groups generally contribute more to their superannuation, with employer contributions being the primary source across all brackets.

It's encouraging to note that Australians across different income levels are actively making additional contributions to their super accounts, taking advantage of the tax benefits offered by super.

I hope your super contributions are on a par with other Aussies making similar income. Explore more about superannuation here for additional insights.

Motley Fool contributor Kate Lee has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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