Your early 50s are a vital time to prioritise your superannuation.
At this stage, your focus should shift from accumulating funds in your superannuation to deciding what your retirement will look like and how to pay for it.
The good news is that at this point, you've most likely built a decent superannuation balance, which means compounding can really start to work in your favour.
But if not, your 50s are also the last major opportunity to significantly boost your superannuation before it's too late.
Here's a breakdown of the average superannuation balance of Aussies aged 53, and the balance you need by this point if you want to retire comfortably.
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What is the average superannuation balance at age 53?
According to the latest data from the Association of Superannuation Funds of Australia (ASFA), the average Australian male aged 50-54 has around $254,074 in their superannuation.
The average 50-54-year-old female has a lot less, at around $190,175.
Around $65,000 is a huge difference for men and women in this age bracket. And that is mainly due to women taking time out of the workforce to raise children, working fewer hours, and having lower overall incomes, as well as taking on a greater amount of unpaid work at home.
Even so, none of these average superannuation balances is anywhere near what Australians need to afford a comfortable retirement when the time comes.
In fact, even if you have an above-average superannuation balance for your age, it doesn't mean you have enough to live the retirement lifestyle that you want.
How much do I need at age 53 to get a comfortable retirement?
Again, ASFA has crunched the numbers. The association estimates that a comfortable retirement will cost around $54,840 per year for singles and $77,375 per year for couples.
This amount means you should be able to afford to maintain a good standard of living. It assumes you'll have top level private health insurance, own a reasonable car, and partake in the occasional meal out or domestic trip.
To fund $54,840 per year for singles and $77,375 per year for couples in retirement, you'll need a superannuation balance of at least $630,000, or a combined $730,000 if you're a couple.
In order to reach that figure, you'd need a balance of $364,000 at age 53, regardless of whether you're a male or female.
And the concerning thing is that this $364,000 figure is significantly higher than the average superannuation balance for 50-54-year-olds.
You say my 50s are the last major opportunity to significantly boost my superannuation savings. How can I do that?
The good news is, at age 53, there are still seven years left until you reach preservation age (when you can access your superannuation balance if retired), or 12 years until you reach age 65 (when you can access your superannuation regardless of whether you're still working or not).
That means there is still plenty of time to boost your superannuation balance up to the level that you need.
The most important thing you can do today is ensure your superannuation is with a well-performing fund and that your risk profile suits your own.
Once you've checked that the money you already have in your super is working as well as possible, the next step is to think about how to add extra funds. Take advantage of additional concessional or non-concessional contributions, whether this is salary sacrificing or after-tax payments (within your annual limits), while you still can.
Also, look into any applicable government initiatives that could help turbocharge your balance. For example, there is a downsizer contributions rule, a bring-forward rule, a government co-contribution rule, and many others.
If that still doesn't give you enough to catch up, there is always the option of delaying retirement by a couple of years. By pushing your retirement back, even by another five years, it gives your investments more time to grow, and it could be the difference between a comfortable retirement and a modest one.
