How much super should I have at 40?
If you’re in your 40s, retirement could still be a few decades away. However, it’s a good idea to take stock of your superannuation to make sure you’re on track to achieve your retirement goals.
Firstly, let’s take a look at the amount of super you will need at retirement. Remember, this will really depend on your unique circumstances, including whether you own a home, your savings and the lifestyle you want to live. We’ll then dive into the amount of super you need right now to achieve this.
How much super do I need to retire?
A single person needs a superannuation balance of $545,000 and a couple needs a combined balance of $640,000 when retiring to achieve a “comfortable” retirement, according to the peak policy and research body for super, the Association of Superannuation Funds of Australia (ASFA). This assumes you use money from your savings and investments and receive a part Age Pension at retirement (which is accessible from age 66, increasing to 67 by mid 2023).
A comfortable retirement allows you to be involved in a broad range of leisure and recreational activities, ASFA says. You can also purchase things like household goods, private health insurance, a reasonable car and electronics, and go on domestic and occasional international holidays. It’s compared to a “modest” retirement, which ASFA says is better than the Age Pension but you can only afford fairly basic activities. For a modest retirement, ASFA says singles and couples alike need a super balance of $70,000. Both standards assume the retiree owns their home outright and is relatively healthy, and has access to the Age Pension (in part or full).
How much super should you have at 40?
To achieve a comfortable retirement, ASFA projects a 40 year old needs $143,000 in their superannuation. This assumes the person retires at the age of 67.
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Age | Super balance needed today for a comfortable retirement |
---|---|
40 years old | $143,000 |
41 years old | $154,000 |
42 years old | $164,000 |
43 years old | $174,000 |
44 years old | $184,000 |
45 years old | $195,000 |
46 years old | $207,000 |
47 years old | $219,000 |
48 years old | $231,000 |
49 years old | $244,000 |
Source: Based on ASFA’s (The Association of Superannuation Funds of Australia) Super Balance Detective calculator for a person turning the age specified in 2021. Comfortable retirement assumes an 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 and that upon retirement the retiree draws down all their capital and receives a part Age Pension. Other assumptions include: Investment returns (nominal), before investment fees and taxes are 6.7%, investment fees are 0.7% of assets, the tax rate is 4.5%, administration fees are $100 per annum and insurance premiums are $100 per annum. The reported required balances are intended for illustrative purposes only.
While these figures can be helpful, remember they are just guidelines. How much you actually need to retire will vary depending on your personal circumstances. Moneysmart recommends considering any large costs you’re likely to face, such as paying off your mortgage or medical costs, and the lifestyle you want to live in retirement. It’s also worth factoring in other sources of income, such as any savings and investments, as well as your eligibility for the Age Pension.
The maximum Age Pension is currently $868.30 a fortnight or $22,575.80 a year for singles, and $1,309.00 a fortnight or $34,034 a year for couples (not including any supplements). How much you can receive will depend on your income and assets, and for couples, the rate varies if you are apart due to ill health.
How much super does the average 40-year-old have?
The average superannuation balance for a 40-year-old Australian is $67,179 for males and $54,765 for females, according to APRA’s latest Annual Superannuation Bulletin. Unfortunately, this means there’s a significant gap between the amount Australians have in their super account and what ASFA projects they need to retire comfortably.
How can I boost my super?
If you’re looking to give your super a boost, you might like to try:
- Consolidating multiple super accounts: if you have multiple super accounts, consider consolidating them into one account to help save on fees. Remember to check with your existing super funds to see what impact this could have, as consolidation may not be for everyone.
- Salary sacrificing superannuation: this is where you get a portion of your pre-tax salary or wages paid into your super account. Salary sacrificed super contributions are usually taxed at a concessional rate of 15% according to the Australian Taxation Office (ATO), which may be lower than your marginal tax rate. However, be aware of your concessional contributions cap, which is currently $25,000 per financial year.
- Making additional contributions: as well as concessional contributions (pre-tax), you can also make non-concessional contributions (from your after-tax pay) of up to $100,000 each financial year. Your cap may vary in some circumstances, such as with bring-forward arrangements, according to the ATO.
- Giving your super a health check: this could involve checking your fund’s performance, making sure you’re not paying too much in fees, evaluating your investment options and checking your insurance cover.
It’s also worth checking if you are eligible for the low income super tax offset or government co-contributions. If you have a spouse, you could also consider super splitting.
If you need help with your super or planning for retirement, you may want to get advice from your super fund or from a financial adviser.
Compare Superannuation with Canstar
The table below displays some of the superannuation funds currently available on Canstar’s database for Australians aged 30 to 39 with a super balance of up to $55,000. The results shown are sorted by Star Rating (highest to lowest) and then by 5 year return (highest to lowest). Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s superannuation comparison selector to view a wider range of super funds. Canstar may earn a fee for referrals.
- Performance, fee and other information displayed in the table has been updated from time to time since the rating date and may not reflect the products as rated.
- The performance and fee information shown in the table is for the investment option used by Canstar in rating of the superannuation product.
- Performance information shown is for the historical periods up to 31/01/2024 and investment options noted in the table information.
- Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here.
- Performance data may not be available for some products. This is indicated in the tables by a note referring the user to the product provider, or by no performance information being shown.
- Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise.
- Any advice on this page is general and has not taken into account your objectives, financial situation or needs. Consider whether this general financial advice is right for your personal circumstances. You may need financial advice from a qualified adviser. Canstar is not providing a recommendation for your individual circumstances. See our Detailed Disclosure.
- Not all superannuation funds in the market are listed, and the list above may not include all features relevant to you. Canstar is not providing a recommendation for your individual circumstances.
- Canstar may earn a fee for referrals from its website tables, and from Sponsorship or Promotion of certain products. Fees payable by product providers for referrals and Sponsorship or Promotion may vary between providers, website position, and revenue model. Sponsorship or Promotion fees may be higher than referral fees. Sponsored or Promotion products are clearly disclosed as such on website pages. They may appear in a number of areas of the website such as in comparison tables, on hub pages and in articles. Sponsored or Promotion products may be displayed in a fixed position in a table, regardless of the product’s rating, price or other attributes. The table position of a Sponsored or Promoted product does not indicate any ranking or rating by Canstar. For more information please see How We Get Paid.
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Performance and Investment Allocation Differences
- 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.
- Some providers use different age groups for their investment profiles which may result in you being offered or being eligible for a different product to what is displayed in the table. See here for more details.
- Australian Retirement Trust Super Savings’ allocation of funds for investors aged 55-99 differ from Canstar’s methodology – see details here.
- The Australian Retirement Trust Super Savings (formerly Sunsuper for Life) product may appear in the table multiple times. While you will not be offered any single investment option, this is to take into account the different combinations of investment options Australian Retirement Trust may apply to your account based on your age. For more detail in relation to the Australian Retirement Trust (formerly SunSuper for Life) product please refer to the PDS issued by Australian Retirement Trust for this product.
- Investment profiles applied initially may change over time in line with an investor’s age. See the provider’s Product Disclosure Statement and TMD and in particular applicable age groups for more information about how providers determine their investment profiles.
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This article was reviewed by our Sub Editor Jacqueline Belesky and Finance and Lifestyle Editor (former) Shay Waraker before it was updated, as part of our fact-checking process.
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