You might expect Australians in their early 70s to have less superannuation than those in their early 60s. After all, many people have stopped working by that age and may have spent several years drawing on their retirement savings.
Interestingly, the latest figures show the opposite, with Australians in their early 70s holding more super on average than those a decade younger.
So, what are the numbers, and what can they tell us about retirement?
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The average superannuation balance at 60
According to Moneysmart, using the latest Australian Prudential Regulation Authority (APRA) data, Australians aged 60 to 64 have an average superannuation balance of $270,800.
This provides a rough guide for someone turning 60, although individual balances will vary considerably depending on their working history, earnings, contributions, and investment returns.
At this age, retirement plans can look very different from person to person. Some Australians have already finished working, while others intend to continue for several more years.
That is important because retiring at 60 can mean funding seven years of living expenses before reaching Age Pension eligibility at 67. Someone who continues working, meanwhile, may have the opportunity to build their balance further while delaying withdrawals.
What about at age 70?
By age 70, many Australians have already spent several years in retirement, but that doesn't necessarily mean their superannuation balances have fallen significantly.
According to the latest figures, Australians aged 70 to 74 have an average superannuation balance of $312,000, which is higher than the $270,800 average for those aged 60 to 64.
One reason retirees can maintain substantial balances is that their super generally remains invested after they stop working. While they may be withdrawing money to fund their lifestyles, the remaining savings can continue generating investment returns.
Others may have delayed retirement or continued working part time, allowing them to preserve more of their savings. They may also be half of a couple, sharing expenses and depleting their balances slower.
How do these figures compare with retirement targets?
The Association of Superannuation Funds of Australia estimates that a single homeowner needs approximately $630,000 at retirement to support a comfortable lifestyle, while a couple needs around $730,000 combined.
Both average balances are well below the single-person benchmark, but that doesn't necessarily mean Australians with these amounts will struggle financially.
The Age Pension can provide an important source of income for eligible Australians from age 67, while couples may benefit from combining their super balances and sharing household expenses.
Retirement timing also makes a significant difference. Someone retiring at 60 may need to fund seven years of living expenses before reaching Age Pension age, whereas a person retiring at 70 is already old enough to qualify, subject to their financial circumstances and other eligibility requirements.
Ultimately, whether a particular super balance is enough will depend on when you retire, your expected living expenses, and what other sources of income you have available. This is why retirement planning needs to go beyond simply comparing your balance with the national average.
