Here's how much super Aussies need in their accounts right now to retire comfortably

Did you know there is a large gap between the amount of super most people have saved up and how much they may actually need to retire? Research shows how much you’re likely to need to comfortably afford occasional travel and recreational activities in retirement.

Whether you’re fresh into the workforce, approaching your 40s or a few years off from retirement age, it can be important to get familiar with your balance. That’s arguably now more important than ever for those who were able to access up to $20,000 in super early last year, to help provide financial support after facing a sustained period of unemployment or reduced income due to COVID-19.

Analysis by Canstar Research showed there could be considerable long-term costs of accessing super early, with a 25-year-old who had $20,000 in superannuation anticipated to lose up to $102,824 by retirement if they had withdrawn the full amount as part of the scheme.

More than 225,000 workers in New South Wales alone effectively “wiped out” their retirement savings with early withdrawals – the most in the nation – according to new research by Industry Super Australia based on Australian Taxation Office (ATO) data.

If you think your super needs a boost in 2021 to get you back on track, it could be helpful to get a picture of where you stand.

In this story:

How much super will I need in my account at retirement?

The Association of Super Funds of Australia (ASFA) estimates the average superannuation balance required to achieve a comfortable retirement would be $640,000 for a couple and $545,000 for a single person, assuming they withdrew their super as a lump sum and received a part Age Pension. How much super you personally need will vary, though, according to the standard of living you want to maintain at retirement.

ASFA defines a comfortable retirement as when a retiree can afford to be involved in a range of recreational activities, buy household goods and pay for top-level private health insurance, a mid-range car, electronic equipment and occasional travel.

How much do I need to have in my super account now to live comfortably after retirement?

Canstar data suggests many Australians could be likely to suffer from a shortfall in superannuation savings when it comes time to retire – if they want to retire comfortably, that is. The research shows that to be on track for this lifestyle, 30-year old men and women would need to have around $61,000 in their super account today, but on average, they are currently between $35,000 and $39,000 short of that balance.

Women currently in their 60s face the biggest super gap of more than $275,000, based on this data.

The below table estimates how much super people of different ages ‘should’ have in their balance today to be on track to afford a comfortable retirement, which might allow you to eat out more regularly, travel further and enjoy more luxuries than would be feasible in a more modest retirement.

How much super should you have?

Gender Age Average balance Balance required today for comfortable retirement Gap
Male 30 $25,520 $61,000 $35,480
40 $56,792 $154,000 -$97,208
50 $111,115 $271,000 -$159,885
60 $180,944 $430,000 -$249,056
Female 30 $21,765 $61,000 -$39,235
40 $46,075 $154,000 -$107,925
50 $87,634 $271,000 -$183,366
60 $154,896 $430,000 -$275,104

Source: – 20/01/2021. Average balance per APRA’s most recent 2019 Annual Superannuation Bulletin. Balance required today for comfortable retirement based on ASFA’s Super Balance Detective Calculator. Gap calculated as the difference between the average balance and the current balance required for a comfortable retirement. Comfortable retirement assumes ASFA’s Comfortable Standard balance of $545,000 (in today’s dollars) by age 67. ASFA assumes future pre-tax wage income of around $65,000 a year, and that upon retirement the retiree draws down all their capital and receives a part Age Pension.

If you’re comparing superannuation funds, the comparison table below displays some of the products currently available on Canstar’s database for Australians aged 30-39 with a balance of up to $55,000, sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Use Canstar’s superannuation comparison selector to view a wider range of super funds.

Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group specified above.

→ Related article: 2020 Superannuation Star Ratings

How do I boost my super account balance so that I can retire comfortably?

If you have found your super balance isn’t on track, Canstar money expert Effie Zahos said there were a few things you could do to help bump it up:

  • Check for any lost super. But relatively new rules around superannuation accounts mean some low balance, inactive super accounts will now be automatically merged with active accounts, or the money will be held by the ATO.
  • Give your fund a quick health check. That is, make sure you’re in the right investment profile for your needs, check the level of insurance you have, be sure you’re not paying too much in fees and that your fund’s performance is on par with its peers over the long-term (bearing in mind that past performance is not necessarily indicative of future performance). Also, think about any other opportunities you could take advantage of to boost your super balance.

How are super funds tracking now to deliver a comfortable retirement?

The Canstar Research team crunched the numbers on a range of super fund investment options and fees to see how much average balances could grow by the time a person reaches retirement age. Inflation and cost of living increases have been taken into consideration.

The data shows it may be worthwhile weighing up your investment option and fees, because they could make a significant difference to your nest egg by retirement.

The super balance projections for those aged 60, which is getting close to retirement age, shows why some Australians may be reliant on receiving additional support via the Age Pension to fund their retirement. Moneysmart advises that if you are five years or less from retirement and are concerned about your super balance being impacted following an uncertain period for investment markets, it’s a good idea to avoid hasty decisions and seek guidance from a licensed financial adviser, your super fund or a Services Australia Financial Information Service officer. It could also be worth seeking out this type of assistance if you are feeling nervous about your super balance after making an early super withdrawal in 2020.

Projected super balance by age and gender

Gender Age Average balance Projected balance at retirement by investment option and fee level
and low fees
and high fees
High growth
and low fees
High growth
and high fees
Male 30 $25,520 $444,646 $305,292 $494,137 $335,599
40 $56,792 $358,393 $263,297 $389,964 $284,655
50 $111,115 $302,638 $239,407 $322,334 $254,340
60 $180,944 $262,851 $232,069 $271,757 $239,874
Female 30 $21,765 $380,785 $261,621 $423,154 $287,584
40 $46,075 $303,771 $223,656 $330,336 $241,662
50 $87,634 $250,485 $198,703 $266,551 $210,904
60 $154,896 $225,041 $198,724 $232,665 $205,406

Source: – 10/09/2020. Based on the average superannuation balance for each gender and age bracket per APRA’s 2019 Annual Superannuation Bulletin. Projected Balance displayed in today’s dollars, and assumes inflation rate of 2.5% p.a. and a cost of living increase of 1.5% p.a. (ASIC MoneySmart Super Calculator). Assumes average adult full-time earnings based on gender (ABS: male $94,224 p.a., female $81,037 p.a.), with the government superannuation guarantee increases of 0.5% p.a. to 12% by July 2025 in line with legislation. Projected balances calculated using ASIC’s MoneySmart Super Calculator with annual returns and fee assumptions as follows: Balanced investment scenario assumes 4.91% net investment returns, high growth investment scenario assumes 5.43% net investment returns, low fees scenario assumes $50 admin fees, and high fees scenario assumes 4% contribution fee and 2% indirect cost ratio. Net investment returns based on annualised returns over the past five years as of 31/07/2020 for investment options in Canstar’s database. Balanced investment options defined as investment options with growth asset allocations between 60% and 80%. High growth defined as investment options with growth asset allocations greater than 80%. All projected balances assume a retirement age of 67.

Do Australians rely on the Age Pension?

On average, eligible Australians receive the Age Pension over a longer timeframe than ever before.

When the Age Pension was introduced in Australia in 1909, the nation’s 4.3 million people had an average life expectancy of just 55 years, and few people were expected to reach the Age Pension age of 60 for women or 65 for men.

In 2021, the qualifying Age Pension is age is now 66 for both genders (although it is gradually increasing to 67), while our life expectancy at birth is more than 80 years of age for both men and women, according to the Australian Institute of Health and Welfare.

It’s therefore likely that retirees will rely on their superannuation, and possibly the Age Pension as well, for a number of years, making it all the more important to act now to set yourself up well for a comfortable retirement.

Image source: Atstock Productions (Shutterstock)

This article was reviewed by our Sub Editor Tom Letts before it was updated, as part of our fact-checking process.

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