How much super should I have at 50?

TAMIKA SEETO
Finance Journalist · 18 March 2021
As you inch closer to retirement, you may be wondering how much super you need to retire comfortably and whether you are on track to get there.

The amount of super you need in retirement will depend on your personal circumstances. Factors like whether you own a home, how much you have in savings and investments, as well as your desired lifestyle standard in retirement will come into play. It’s important to bear this in mind before we look at the numbers.

How much super do I need to retire?

Singles need $545,000 in superannuation, while couples need a combined $640,000 to fund 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 you can currently apply for from age 66, increasing to 67 by mid 2023).

super at 50
Source: Towfiqu ahamed barbhuiya/Shutterstock.com

A comfortable retirement is where you can be involved in a broad range of leisure and recreational activities, ASFA says. You can also purchase things like household goods, a reasonable car and private health insurance, and go on domestic and occasional international holidays.

It’s compared to living a “modest” retirement, which ASFA says is better than the Age Pension but you can only afford fairly basic activities. For a modest retirement, singles and couples both require a super balance of $70,000. ASFA says its budgets assume the retiree owns their home outright, is relatively healthy and is eligible for the Age Pension (in part or full).

How much super should you have at 50?

To retire comfortably, ASFA has calculated that a 50-year-old needs to have $257,000 in their super account. This assumes the person retires at the age of 67, draws down their capital and receives a part Age Pension at retirement.

Age Super balance needed today for a comfortable retirement
50 years old $257,000
51 years old $271,000
52 years old $285,000
53 years old $300,000
54 years old $315,000
55 years old $330,000
56 years old $345,000
57 years old $360,000
58 years old $380,000
59 years old $395,000

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.

These figures are only guidelines. The amount of super you actually need at retirement will depend on your personal circumstances. For example, Moneysmart recommends factoring in any big costs you may face in retirement (such as paying off a mortgage or medical fees), as well as the lifestyle you want. Also consider what other sources of income will be available to you, such as savings and investments, and 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). The amount you can receive will depend on your income and assets. For couples, the rate can also vary if you are apart because of ill health.

How much super does the average 50-year-old have?

The average super balance for a 50-year-old Australian is $130,066 for males and $101,560 for females, according to the latest APRA Annual Superannuation Bulletin. This means there’s a significant shortfall between the amount Aussies have in their super account and what ASFA projects they need right now to retire comfortably in the future. For women, the gap is over $150,000.

How can I boost my super?

If your super is not as high as you’d like, you might want to consider:

  • Consolidating multiple super accounts: if you have multiple super accounts, consider consolidating them into one to help save on fees. Do check with your existing super funds first to see what impact consolidation may have as it may not suit everyone.
  • Salary sacrificing superannuation: in this arrangement, a portion of your pre-tax salary or wages is 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 less than your marginal tax rate.
  • Making additional contributions: in addition to concessional contributions (pre-tax), you can also make non-concessional contributions (from your after-tax pay). Be aware of the contributions caps that apply.
  • Giving your super a health check: check your fund’s performance, make sure you’re not paying too much in fees, consider your investment options and check your insurance cover.

You may want to check if you are eligible for the low-income super tax offset or government co-contributions. If you have a spouse, you could consider super splitting.

If you need help with your super or planning for your retirement, you may want to seek advice from your super fund or a financial adviser.

Cover image source: Syda Productions/Shutterstock.com

This article was reviewed by our Sub Editor Jacqueline Belesky and Finance & Lifestyle Editor Shay Waraker before it was published as part of our fact-checking process.

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