Reaching retirement age might be an exciting milestone for some Aussies, but a concerning time for others. What if you don't have enough money in your superannuation to fund your lifestyle when you finally stop working? Here's a rundown of exactly what you need at the age of 64, and how far you are away from it.
Image source: Getty Images
What is the average superannuation balance at age 64?
There isn't an exact figure for the average superannuation balances at the exact age of 64, but there are rough estimates.
According to Rest Super, the average superannuation balance for Australians aged 60-64 is $380,737 for men and $300,717 for women.
Although at the age of 64, it's safe to assume that you'd need closer to the balance bracket in the age group above. For men aged 65-69, the average super balance is $428,533, and for women it's $379,483.
Is this enough for a comfortable retirement?
The benchmark for a comfortable retirement, according to the latest ASFA Retirement Standard, is around $53,000 per year for a single person and $75,000 per year for a couple.
To support that level of spending, ASFA estimates you'll need a super balance of roughly $595,000 for singles and $690,000 for couples by age 67.
That's assuming you own your home outright, have access to some age pension payments, and your super continues to earn investment returns throughout retirement.
For a modest retirement, you'll need around $100,000 more.
So there is a significant gap between the average and what Aussies actually need to fund their retirement.
What to do if your superannuation balance is falling behind
While there is no official retirement age in Australia, in order to be eligible for the Age Pension, individuals must be at least 67 years old.
When it comes to accessing your superannuation, generally, it's only possible to do so after you've reached your preservation age and retired from income-earning employment, or met some other condition of release.
Preservation age is between 55-60 years old, depending on when you were born. It's important to remember that once you have reached preservation age, you may be able to access some of your super, but not all of it. You'll still need to meet a condition of release. Many wait until they're 65 years old so they can access their full super balance regardless of their employment status.
This means that, at the age of 64, you're likely only one year away from withdrawing from it, if you haven't already started.
If your superannuation balance is falling behind, there is still time to close the gap. You can boost your super balance either before or in retirement by making additional concessional or non-concessional contributions (within your annual limits).
It's also important to make sure your super fund is performing well, particularly how its investments linked to the S&P/ASX 200 Index (ASX: XJO) are tracking, since even small changes in returns can have a huge impact on your end balance. So, it's crucial to review your investment strategy and ensure it aligns with your retirement goals and risk appetite.
