In Australia, many government or association estimates around retirement are based on the understanding that you'll retire at age 67. By this point, you'll be able to access your superannuation (from age 65) and you're also eligible to receive Age Pension payments.
Although with higher inflation and rising cost-of-living, more and more Australians are pushing their retirement to their 70s to give them more time to build up their balance. It also means there will be fewer retirement years to fund.
Regardless of when you decide to retire, by age 67 you should know exactly how much superannuation you have, and what you need to live the retirement lifestyle you want.
Here's a breakdown of the average superannuation balance of Australians aged 67, and how much you actually need by retirement.
The numbers are quite different.
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What is the average superannuation balance at age 67 in Australia?
According to the Association of Superannuation Funds of Australia (ASFA) data, the average superannuation balance for Australian men aged 65-69 is $448,518, and for women it is $392,274.
If your superannuation balance is on track with the rest of the population, that's great news. But it doesn't mean you have enough to retire with the lifestyle you want.
So how much money do I really need by age 67 to retire comfortably?
The benchmark for a comfortable retirement has climbed even higher this year. Australians now need $54,840 per year to retire comfortably, or $77,375 a year for a couple.
To support that level of spending, ASFA estimates you'll need a super balance of roughly $630,000 as a single and $730,000 as a couple by the age of 67.
A comfortable retirement lifestyle is defined as one that allows Australians to maintain a good standard of living.
This includes top-level private health insurance, ownership of a reasonable car brand, regular leisure activities, funds for home repairs and renovations, occasional meals out, and an annual domestic trip.
The figures also assume you own your home outright and that you're receiving the age pension.
Help! I'm falling behind. What can I do?
At age 67 you still have a few options to help boost your superannuation balance and retirement lifestyle.
Many Australians are now delaying their retirement by a few years and retiring in their 70s. This gives you more time to build your superannuation balance, and means there are fewer retirement years to fund. Even three to five years gives your investments more time to grow.
Given superannuation funds are heavily invested in the Australian share market, particularly the S&P/ASX 200 Index (ASX: XJO), the longer you wait to access your balance, the more time it has to benefit from compounding growth.
If you don't want to delay retirement, another option is to live a modest one. ASFA defines a modest retirement as one which is able to cover expenses slightly above the full Centrelink Age Pension.
Think basic health insurance with limited cap payments, infrequent exercise, a limited home repair budget, minimal utility expenses, limiting dining out, and maybe an annual domestic trip. Again, it assumes you own your home outright.
It's not the ideal scenario but it's certainly do-able.
Australians need $35,503 per year, or $51,299 per year for a couple. To fund that, ASFA estimates you need a superannuation balance of around $110,000, or a couple would need $120,000. These balances are well within the average for Australians at age 67.
