Reaching 65 is a milestone that often brings retirement into sharp focus.
With the age pension now kicking in at 67, this is the time when many Australians take a serious look at their superannuation and wonder if they have saved enough.
Because super balances aren't something people usually compare, it is not easy to know whether you're tracking above or below the average.
Thankfully, there is data out there to help gauge where you stand.
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What is the average superannuation balance at 65?
As there isn't data for an exact amount for Australians aged 65, we have to use the surrounding age brackets to work out what it is likely to be.
For example, according to data from Rest Super, women aged 60–64 have an average super balance of $300,717, while those aged 65–69 average $379,483.
Men, on the other hand, average $380,737 between 60–64 and $428,533 between 65–69.
Using those figures as a guide, I think it is fair to estimate that the average 65-year-old woman holds approximately $340,000 in superannuation, and the average man has around $404,000.
Is this enough for a comfortable retirement?
The Association of Superannuation Funds of Australia (ASFA) estimates that a single retiree needs about $595,000 in super to achieve a comfortable retirement, while couples need around $690,000 combined.
It describes a comfortable retirement 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.
As a result, based on the above data, the average couple is well-positioned for a comfortable retirement.
But if your balance falls short, you won't necessarily struggle. The age pension can help fill the gap, but it may mean adjusting your expectations or relying on other assets like savings or investments.
For example, ASFA estimates that a single person needs $340,000 for a modest retirement and a couple needs $385,000. This level of retirement is described as follows:
The modest retirement standard budgets for a retirement lifestyle that is slightly above the Age Pension and allows retirees to afford basic health insurance and infrequent exercise, leisure and social activities with family and friends.
What if your balance isn't where you'd hoped?
If you're nearing retirement and feel your super isn't quite where it should be, there are still strategies available.
You might consider downsizer contributions, which allow eligible homeowners to put up to $300,000 from the sale of their home into super. Alternatively, making personal concessional contributions (within annual limits) can give your balance a final boost before retirement.
Even small actions, like reviewing your fund's performance or switching to lower fees, can make a noticeable difference over time.
Foolish takeaway
Understanding the average superannuation balance at 65 is a great starting point, but it is only part of the picture.
Whether you're above, below, or right on the average, the key is knowing where you stand and taking action to close any gap between your current balance and your retirement goals.
