Your 60s are a turning point in your life where the priority for your superannuation and your finances needs to switch from growth to preservation.
After all, at the age of 61, you're just four years from the average Australian retirement age and six years from potentially receiving the Age Pension payment.
The question is, do you know exactly how much you have in your super, and exactly how much money you need to fund your retirement when you decide to stop working?
Here's a rundown of what the average Aussie has at age 61, and what you actually need to retire comfortably.
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What is the average superannuation balance at age 61?
There isn't an exact figure for the average superannuation balance at age 61, but the Association of Superannuation Funds of Australia (ASFA) has a good guideline.
ASFA's data shows that at age 60 to 64, the average Australian male has around $395,852 in their superannuation. Meanwhile, the average 60 to 64-year-old female has less, at approximately $313,360.
How does your balance compare to the average Aussie the same age?
What does a comfortable retirement look like?
ASFA defines a comfortable retirement as being able to maintain a good standard of living above and beyond the Age Pension.
It assumes you'll have top-level private health insurance, own a good brand of car, and do regular leisure activities.
It allocates funds to set aside to build an emergency fund, for home repairs or renovations. And perhaps even go for the occasional meal out, and an annual domestic trip.
How much will that cost me?
According to ASFA, a comfortable retirement for Australians aged 65 to 84 years old 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.
How do I know if I'm on the right track?
Unfortunately, at up to $395,852, the average superannuation balance at age 61 falls short of what Aussies at the same age actually need in order to reach the retirement lifestyle they want.
I've crunched the numbers, and it turns out that in order to reach the superannuation balance needed by age 67, at age 61, you'd need closer to $519,000 in your super.
That's significantly higher than the average balance for both men and women the same age.
How can I bridge the gap between my average balance and what I actually need?
At age 61, it's not too late to catch up.
The first thing to do is check that your super fund is performing well and your risk profile is appropriate for your age.
Next, you'll need to focus your attention on making extra contributions however you can. Individuals can make concessional (before-tax) super contributions, such as salary sacrificing, taxed at a reduced rate 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. Every cent counts when it comes to compound growth!
