At age 55, you're on the home stretch towards retirement. It's vital that you're on top of how much is in your superannuation and how it compares to what you need to quit work.
At this age you're just five years from your preservation age (when you can access your superannuation if you've retired), 10 years from accessing your superannuation regardless of whether you've stopped working or not, and 12 years away from the Age Pension (if eligible).
It's the final window to boost your superannuation and leverage compound growth.
You'll want to ensure your super fund is performing well, and that you're adding additional contributions wherever you can.
You should start aiming to clear your debt, including your mortgage. It's also potentially the time of start making structural life adjustments. These can make the transition to retirement much easier.
The downsizer contribution rule, for example, allows Australians aged 55 or older to contribute $300,000, or $600,000 for a couple, from the sale of their home into super.
That's a great way to boost your balance before retirement.
Here's a breakdown of what you should have in your superannuation at age 55 to find out if you're on track.
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The cost of retirement
Most Australians aim for a comfortable retirement. That means enough money for a good-quality lifestyle and funds to pay for things like top-tier private health insurance, regular leisure activities, meals out, and potentially even some travel.
The Association of Superannuation Funds of Australia (ASFA) calculates that a comfortable retirement will cost around $55,923 per year for singles and $78,566 for couples.
These figures assume you own your home outright and that you'll receive a part Age Pension. That means additional mortgage or rental costs will be on top.
How much do I need in my superannuation to afford a comfortable retirement?
Again, ASFA has run the numbers. It's estimated that single Australians will need around $630,000 in their superannuation at retirement, and couples will need around $730,000 to be able to finance a comfortable retirement lifestyle.
The catch is that these figures are calculated on the assumption that you'll be retiring at age 67. So if you want to stop working earlier, you'll need to account for those extra years up to age 67.
If you don't own your home outright you'll also need to add mortgage payments or rent onto your balance.
At age 55, how much superannuation is considered as 'on track'?
Assuming you have a $100,000 per year income and that you're aiming for a $630,000 superannuation balance, at age 55 Australians should have around $348,000 in their superannuation.
If your income is a little lower, around $75,000, you'll need a bit more. A superannuation balance of around $367,000 at age 55 should still put you on track to reach the $630,000 goal within the next 12 years.
How does your balance compare?
