Your late 50s are a turning point in your life when your priority shifts from building your superannuation to planning what your retirement might look like.
After all, at the age of 59, you're just one year from preservation age (when you can access your super if you've stopped working), six years from the average Australian retirement age of 65, and eight years from potentially receiving the Age Pension payment at age 67.
The question is: do you know how your super balance compares to others your age? Do you know exactly how much money you need to fund your retirement?
Here's a breakdown of what the average Aussie has at age 59, and what you actually need to retire comfortably in the next few years.
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What is the average superannuation balance at age 59?
There isn't an exact figure for the average superannuation balance at age 59, but the Association of Superannuation Funds of Australia (ASFA) has a good guideline.
ASFA's data shows that at age 55-59, the average Australian male has around $319,743 in superannuation. The average female the same age has approximately $242,945.
But given that age 59 is right on the boundary of the 55-59 age bracket, it can be helpful to consider the bracket above as well.
Ideally you want to be somewhere in between the two.
ASFA's data shows that at age 60-64, the average Australian male has around $395,852 in their superannuation. Meanwhile, the average 60-64-year-old female has less, at approximately $313,360.
So, how does your balance compare to the average Aussie the same age?
How much does it cost to retire?
In Australia, retirement is generally split into two broad categories: modest and comfortable.
A modest retirement is defined as being able to cover expenses slightly above what the full Centrelink Age Pension would provide from age 67.
ASFA estimates that a modest retirement will cost around $36,434 per year for singles and $52,473 per year for couples. These figures assume you'll also receive a part Age Pension and that you own your home outright.
A comfortable retirement as one that enables retirees to maintain a good standard of living well beyond the age pension.
ASFA data shows that a comfortable retirement is estimated to cost around $55,923 per year for singles and $78,566 for couples. Again, it assumes you'll receive a part Age Pension and that you own your home in full.
That means ASFA's data indicates that by age 67, single Australians need a superannuation balance of approximately $630,000. And couples should have closer to $730,000.
At age 59, is the average superannuation balance on track for retirement?
If your superannuation is in line with the rest of the population, then you'll be able to afford a very basic and modest retirement lifestyle from the age of 67.
It could cover things like basic health insurance and home repairs, but wouldn't leave much room for leisure activities or meals out, let alone a holiday.
But if you're expecting to live a retirement lifestyle beyond the basics, you're already falling behind.
I've crunched the numbers, and at age 59, you should have around $479,500 in your superannuation.
As you can see, this is significantly higher than the average balances in both age brackets.
Is it too late to catch up?
Thankfully, no.
At age 59, there is still time to boost your superannuation before it's too late.
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, which are taxed at a reduced rate. 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!
