For many Australians, turning 50 is a milestone that brings retirement planning into sharper focus.
With roughly 15 years until the age pension age of 67, your superannuation balance starts to play a bigger role in shaping your financial future.
The question many people ask is: Am I where I need to be, or do I need to take action to catch up?
Super can be tricky to measure because it's not something most people talk about openly. So, what does the average 50-year-old's super look like? Let's take a look.
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What is the average superannuation balance at 50?
While there's no single figure for exactly age 50, the averages for the surrounding age brackets give us a fair idea of what sits in their accounts.
According to REST Super, Australians aged 45–49 have an average super balance of about $180,958 for men and $136,667 for women. For those aged 50–54, the averages rise to around $237,084 for men and $176,824 for women.
That puts the midpoint for a 50-year-old at roughly $200,000 for men and $155,000 for women.
If you are close to those amounts, you're sitting near the national average. But the real question is: will that be enough for a comfortable retirement?
What do you need?
Firstly, what is a comfortable retirement? Well, the Association of Superannuation Funds of Australia (ASFA) describes it as follows:
The comfortable retirement standard allows retirees to maintain a good standard of living in their post work years. It accounts for daily essentials, such as groceries, transport and home repairs, as well as private health insurance, a range of exercise and leisure activities and the occasional restaurant meal. Importantly it enables retirees to remain connected to family and friends virtually – through technology, and in person with an annual domestic trip and an international trip once every seven years.
To have this sort of retirement, an Aussie single homeowner needs around $595,000 in super when they stop working. Whereas a couple would be needing $690,000 combined.
Using the Moneysmart superannuation calculator, the average single 50-year old male with $200,000 in super and a salary of $70,000 a year would end up with $460,000 at retirement.
And the average single 50-year old female with $155,000 in super and a salary of $70,000 a year would have $370,000.
Clearly, on a standalone basis, the average 50-year old Aussie is going to fall short of a comfortable retirement as things stand.
However, the average couple is well-placed to have more than ASFA needs with a balance of $830,000.
How to boost your super at 50
The good news is that if your balance isn't where you'd like it to be, there is still time to make meaningful improvements before retirement.
Extra concessional contributions via salary sacrifice can boost your balance while reducing your taxable income. You can also consider non-concessional top-ups if you have room under the cap.
In addition, reviewing your superannuation fund is equally important. If your super fund has a track record of underperforming its peers, it could be worth considering a switch. After all, with such large sums, every percent counts.
Foolish takeaway
Understanding where you stand at age 50 is an important step toward planning the retirement you want.
With well over a decade before reaching pension age, there's still plenty of time to grow your super and put yourself on track for the kind of retirement you've been dreaming of during your working life.
