At age 55, you're on the home stretch before retirement, so it's important to know if your superannuation balance is on track.
At this age, you're just five years from reaching your preservation age. This is when you can access your superannuation balance if you've stopped working.
You're also around 10 years from the average retirement age in Australia.
The clock is ticking, so do you know how much is in your superannuation? And how does it compare to others the same age as you?
Here's a breakdown of what the average Aussie has in their super at age 55, and also what you should have at this age to retire comfortably when the time comes. Because unfortunately, the two numbers aren't the same.
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Average superannuation balance at age 55
There isn't an exact figure for the average superannuation balance at age 55, but the Association of Superannuation Funds of Australia (ASFA) has a good guideline.
ASFA's data shows that at age 55 to 59, the average Australian male has around $319,743 in superannuation. The average female in the same age bracket has approximately $242,945.
So, how does your balance compare to the average Aussie the same age?
How does this compare to what I actually need in my super to retire comfortably?
That's the catch.
Even if you're on track with the rest of the population, you still might not have enough to fund a comfortable retirement when the time comes.
In order to retire comfortably, ASFA estimates that it'll cost single Australians around $55,923 per year. It'll cost couples living together closer to $78,566 per year in total.
These figures also assume you'll start your retirement at age 67. It also assumes that you'll receive a part Age Pension around this time and that you own your home outright.
In order to fund this type of comfortable retirement, ASFA calculates that single Australians will need around $630,000 in their superannuation at age 67. Meanwhile, couples will need around $730,000 combined at the same age.
How do I know if I'm on track at age 55?
ASFA has a nifty tool to help calculate what you should have in your superannuation at age 55 in order to reach the balance you need by age 67.
It shows that, at this age, Australians should have close to $399,000 in their superannuation in order to reach their goal.
Of course, if you're planning to retire a little earlier than 67, or you think you'll need to pay mortgage repayments or rental fees in your retirement years you'll need to account for these costs on top of this estimate.
You can see that, at an average $319,743 for men or $242,945 for women, many Australians are already falling behind.
Good news! It's never too late to boost your superannuation balance
At age 55, you're still several years away from retirement, so there's still time left for your superannuation to catch up.
The easy way to boost your balance at this age is to make 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.
You'll also want to check that your fund is performing well and that the risk profile of your portfolio suits your own.
Then you can let compound growth do the rest of the heavy lifting.
