Knowing how much superannuation you have, and how much you should have, is crucial to ensuring you have sufficient retirement savings for a comfortable lifestyle after you stop working.
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Retirement savings falling short
While comparisons with others might not be helpful in themselves, what is interesting is that, on average, 45-year-olds do not have enough in their superannuation to be on track for a comfortable retirement.
Figures from the Association of Superannuation Funds of Australia (ASFA) show that for men aged 45-49 the average superannuation balance is $193,501, while for women it is $147,146.
But ASFA also has a useful calculator called Super Detective, which will show you how much superannuation you need for your age to be on track for what they deem a comfortable retirement.
That figure for a 45-year-old is $239,000 – well above the average.
ASFA's Retirement Standard, or what they deem necessary for a comfortable retirement, envisages a superannuation balance which generates $55,923 per year for singles or $78,566 for couples.
It envisages retirees being able to afford top level health cover, a reasonable car, leisure activities and occasional travel as well as home maintenance.
Keep in mind it also assumes you own your own home and draw a part pension once you hit the pension age of 67.
How to boost your superannuation?
-If your superannuation is coming up short, there are various strategies to boost it, with some of them also being tax-effective.
The first step is to confirm that you have only one superannuation account. As simple as it sounds, this can save you from a double-up on fees charged by your superannuation provider.
Extra contributions can also be made to superannuation in the form of concessional and non-concessional contributions.
Concessional contributions are taxed at just 15% and include money contributed by your employer, salary sacrifice contributions, and extra contributions you make up to a cap of $32,500.
If funds permit and your superannuation balance is less than $500,000 in the last financial year, you can also carry forward any unused concessional contribution cap amounts from the previous five financial years.
The amount you are able to contribute in this way can be found in your myGov account.
A notice of intent to claim must be lodged with your super fund for concessional contributions so they know to deduct the 15% tax from the amount.
It is also possible to make non-concessional contributions up to $130,000 and to contribute more than this amount using the bring-forward rule.
