As Australians approach 55, retirement planning becomes all the more critical, and the question arises—how does your account stack up against the average superannuation balance?
Recent data from the Association of Superannuation Funds of Australia (ASFA) shows that Aussie savers are concerned about their retirement.
Insights into basic superannuation statistics could be helpful in understanding where you sit against the crowd.
Getting ahead of the crowd could be one more step on the road to a comfy retirement.
Let's delve into the current average super balance at 55 and how it aligns with retirement goals.
What's the average superannuation balance at 55?
By the time you're 55 years old, you'll typically have anywhere from 10–12 years until retirement age when you can access super.
ASFA data reveals that the average superannuation balance for Australians aged 55–59 is approximately $286,000 for men and $209,000 for women.
This doesn't give the exact average at 55, but it gives a reasonable number for the age range.
What's important is not so much the average itself as whether it's high enough to provide a solid bastion in retirement.
And the data shows these averages fall short of the ASFA recommendation for a comfortable retirement.
To achieve a comfortable retirement lifestyle, ASFA suggests individuals should aim for a super balance of around $595,000 for singles and $690,000 combined for couples by age 67.
What is the budget for a comfortable retirement anyway?
The budget includes costs for essentials like groceries, healthcare, leisure, and one annual domestic trip plus an international trip every seven years.
For singles, ASFA says this translates to an estimated annual income of $52,085, while couples are recommended to plan for $73,337. This is above the average superannuation balance at 55.
What do you need by 55?
ASFA provides some useful benchmarks for what balance you need at what age to be comfortable in your golden years. These are based on historical returns of assets such as shares in the S&P/ASX 200 Index (ASX: XJO).
For instance, the recommended super balance is around $59,000 by age 30, and by age 40, it rises to approximately $156,000.
By the time Australians reach age 50, aiming for $281,000 is advised to stay on track for a comfortable retirement.
At 55, which is often a turning point for retirement planning, ASFA suggests a super balance of around $395,000 to maintain a comfortable lifestyle post-retirement.
Meeting this target by 55 positions you well to remain ahead of the average superannuation balance, ensuring you meet the "comfortable retirement" threshold.
As a reminder from above, this is $595,000 for singles and $690,000 for couples by 67, and allows for a retirement that covers essentials and some lifestyle luxuries.
However, those falling short at 55 can still close the gap by making catch-up contributions, optimising fund fees, and investing strategically to boost their balance as retirement draws closer.
Foolish takeaway
Average superannuation balances are a helpful benchmarking tool for Aussies. The key is knowing the average and getting ahead of it.
Equally key is knowing there is always time to make up contributions or increase current contributions for long-term effects.
In any sense, keeping an eye on the long term is key.
