Your superannuation is an essential tool to help you build enough wealth to support you in your retirement years.
Once you reach your 50s, many Aussies start to think about what their retirement might look like, and how much that might cost.
Then, by your early 60s, you're in the home stretch. This is when many Australians start to move from a super accumulation phase to the pension phase.
So, how do you know if you're on track?
Here's a breakdown of what the average Aussie has in their super at 51 versus 61 years old, and what you'd need at each age to have enough for retirement.
Find out how yours compares.
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How much superannuation does the average Australian have at age 51?
There isn't an exact figure for the average superannuation balance at age 51, but the Association of Superannuation Funds of Australia (ASFA) has a good guideline.
ASFA's data shows that at age 50 to 54, the average Australian male has around $254,071 in superannuation. The average female in the same age bracket has approximately $190,175.
How much superannuation does the average Australian have at age 61?
The average 60 to 64-year-old Australian male has an average superannuation balance of $395,852, and women have around $313,360.
Age 51 versus age 61: Why is the superannuation gap so wide?
The difference between super balances at age 51 versus age 61 is significant.
Over the 10-year period, average balances increase by up to $142,000.
The difference represents the fact that these individuals have had more time to add additional contributions to their superannuation balance. But it also shows the importance of compounding.
By accumulating wealth early on, investing in a well-performing fund, and at a risk profile that suits your own, compounding can help to supercharge your balance down the line.
Are these average balances enough to retire on?
No. In fact, the average Australian is quite far behind.
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.
Ok, so how much should Aussies have in their super by ages 51 and 61 to be on track?
Using ASFA's Super Balance Detective tool, I've calculated what you'd need at ages 51 and 61 to reach that sum.
Assuming you're aiming for the $630,000 superannuation balance needed for an individual. At age 51, you need around $329,500 in your superannuation.
At age 61, this should be more like $519,000 to be considered "on track".
How does your superannuation balance compare to others the same age, and what you need to live a comfortable retirement lifestyle later on in life?
