Once you reach your early 60s, your superannuation balance should become a priority.
After all, at the age of 63, you're just two years from the average retirement age and four years from potentially receiving the Age Pension payment. By this age, you should know exactly what is in your super, and how much money you need to fund your retirement when you finally stop working.
Here's a rundown of what the average Aussie has at age 63, and exactly what you actually need.
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What is the average superannuation balance at age 63?
There isn't an exact figure for the average superannuation balance at age 63, but the Association of Superannuation Funds of Australia (ASFA) provides a good guide.
The data shows that at age 60 to 64, the average Australian male has approximately $395,852 in their superannuation. Meanwhile, the average female has around $313,360.
How does your balance compare?
How much will retirement cost me?
ASFA data also shows how much Australians actually need in their superannuation in order to live a comfortable retirement.
That's one where retirees can expect to maintain a good standard of living. It assumes you'd have top-level private health insurance, own a reasonable car brand, and engage in regular leisure activities. It also includes funds for potential home repairs or renovations, the occasional meal out, and perhaps even an annual holiday.
According to ASFA, a comfortable retirement is expected to cost around $54,840 per year for single Aussies. It is expected to cost roughly $77,375 per year for a couple.
These figures also assume that you'll be entitled to receive a part Age Pension payment once you reach age 67.
That means ASFA's data indicates that by age 67, single Australians need a superannuation balance of approximately $640,000. And couples should have closer to $730,000.
Will the average super balance at age 63 be enough to fund my retirement?
It's unlikely.
In fact, concerningly, with up to $395,852 in their superannuation, Australians at age 63 are already falling very far behind.
ASFA has crunched the numbers, and it turns out that in order to reach the total balance needed at age 67, you'd need a superannuation balance of around $562,000 at age 63. That is significantly lower than the average for both men and women.
What can I do to catch up?
Even though, at age 63, you're very close to retirement age, there are still things you can do to boost your superannuation balance to a level you can retire on.
The most important thing you can do is to check that your super fund is performing well and your risk profile is appropriate for your age. At age 63, it might make more sense to shift your risk profile from long-term growth to capital preservation.
You'll also need to add extra contributions wherever you can. Individuals can make concessional (before-tax) super contributions, such as salary sacrificing, taxed at a reduced rate of 15% and up to an annual cap. You can also make after-tax payments within your annual limits.
It also makes sense to check in with Government contribution rules. There are several rules and co-contribution rules you might be eligible for, depending on your personal circumstances.
Another option is to delay your retirement and give your superannuation time to enjoy more compound growth. The average retirement age in Australia is currently around 65 years old, but more and more individuals are working into their 70s.
