With the age pension offering little more than the basics, Australians approaching retirement are increasingly relying on their superannuation to fund the kind of lifestyle they actually want in retirement.
But how do you know if you're on track — especially with retirement potentially just a few years away?
Well, if you're about to turn 60 and you are wondering how your super compares to others out there, read on to find out the numbers.
Image source: Getty Images
What is the average superannuation balance at age 60?
Unfortunately, there isn't an exact figure for Australians aged 60, but there is data from REST Super that gives us a decent estimate.
For people aged 55 to 59, the average superannuation balance is $301,922 for men and $228,259 for women.
Whereas for the 60 to 64 age group, it increases to $380,737 for men and $300,717 for women.
This suggests the average 60-year-old has a balance somewhere in between roughly $340,000 for men and $265,000 for women.
If your balance is around these levels, you're likely tracking in line with the national average.
What could your balance look like by retirement?
At 60, the age pension age is just seven years away. That's still time to give your super a meaningful boost — especially if you're contributing and invested.
Let's assume a starting balance of $265,000 (women) and $340,000 (men), monthly contributions of $750, and an average annual return of 9%.
Based on these numbers, by age 67, those balances could grow to approximately $570,000 for women and $708,000 for men.
But it is worth remembering that seven years isn't a long time for the share market. We could go through a bull market period and the returns could be stronger than average or we could go through a bear market and returns could be weaker than normal.
In addition, the performance of your individual superannuation fund will have a big impact on how your money grows. Even in a bull market a poorly managed super fund could underperform and leave you with less than desired.
Is this enough?
Let's imagine that you do end up with a superannuation balance of $570,000 (women) or $708,000 (men). Is that enough?
The Association of Superannuation Funds of Australia (ASFA) estimates that a single person needs $595,000 in super at age 67 to retire comfortably. Whereas a couple would require a combined balance of $690,000.
ASFA notes that a comfortable retirement allows for a good standard of living, including private health insurance, regular leisure activities, and occasional travel.
Alternatively, for a modest retirement, which covers basic living costs, including essential expenses and some leisure activities, but with limited discretionary spending, a single person and a couple both require $100,000.
What if you're behind the curve?
If your super balance at 60 is below the average, it is not too late to take action.
Even in your early 60s, additional contributions, a focus on performance, and the right asset allocation can make a significant difference.
Small steps now could result in thousands of dollars more by the time you retire.
Foolish takeaway
Knowing your super balance — and how it stacks up against the average — gives you a clear sense of where you stand.
If you're 60 and feeling behind, the good news is there's still time to bridge the gap. And if you're on track or ahead, now is the time to fine-tune your strategy to ensure you're ready for retirement when the time comes.
