How much super should I have at my age?

There may be a large gap between the amount of super you’ve saved by a certain age and how much you’ll actually need for when they retire. If that’s you, then there are things you can do to help boost your super.

Whether you’re fresh into the workforce, midway through your working life or a few years off from retirement age, it’s important to get familiar with your super balance.

It’s always helpful to get a picture of where you stand to know whether you need to take action to put some extra in your super.

How much super do I need to retire?

The average superannuation balance needed at age 67 for a comfortable retirement is $690,000 for a couple and $595,000 for a single person, according to the latest Retirement Standard document from the Association of Super Funds of Australia (ASFA). That’s assuming they withdraw their super as a lump sum and receive a part of the Age Pension.

About 2,576,580 people in Australia were getting some or all the Age Pension payments from the Australian Government, according to figures for December 2022. About 45% of recipients were men, 55% were women.

How much super you’ll need personally will vary 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 things like top-level private health insurance, a reasonable car, electronic equipment and occasional travel.

The super savings needed at age 67 for a more modest retirement is $100,000 for both a couple and single person.

→ Related article: What’s changing with your superannuation in 2022?

How much super do I need at my age?

Many Australians could be short in superannuation savings when it comes time to retire, if they want to retire comfortably, Canstar data suggests.

According to ASFA’s Super Balance Detective calculator, a 30-year-old would need to have around $59,000 in their super account today if they aim to retire comfortably at age 67.

But Canstar’s Research shows a shortfall in average super balances according to data from the Australian Prudential Regulation Authority: a gap of $26,144 for men and a larger gap of $31,511 for women.

Women currently in their 60s face the biggest super gap of more than $267,736 based on this data.

The table below shows estimates of how much super people of different ages should have in their balance today to be on track to afford a comfortable retirement.

How much super should I have?

Average super balance by age.
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Source: www.canstar.com.au – 30/05/2023. Average balances based on those reported in the APRA Annual Superannuation Bulletin (June 2022). Balance required today for comfortable retirement based on the Association of Superannuation Funds of Australia (ASFA) Super Balance Detective calculator for a person who turned 30, 40, 50 or 60 in 2023. 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 $595,000 (in today’s dollars) by age 67. ASFA assumes future pre-tax wage income of around $65,000 and then 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.

Remember these are only estimates and average figures, so it might be a good idea to check your own super balance to see if you’re on track to reach your goal when you plan to retire.

→ Read more: Worried you’ll run out of super in retirement?

How much does it cost to live comfortably in retirement?

Couples aged 65-84 have a yearly spend of about $70,482 and singles $50,004 to live comfortably in retirement, according to ASFA’s March quarter 2023 figures. That’s up by 1.1% on the previous quarter, and up 7.7% over 12 months.

Comfortable annual retirement budgets for those aged 85 and over were $64,536 for couples and $46,618 for singles, reflecting a different expenditure pattern in later life.

ASFA says retirees have faced significant pressure on their household budgets due to the historically high inflation.

“Retiree budgets have been under substantial pressure for over 18 months due to the higher cost of essential goods and services, namely food, fuel and electricity, with the latter up 15% over the year,” said ASFA CEO, Dr Martin Fahy.

ASFA has compiled a breakdown of what a typical retiree would need to spend to live comfortably and modestly at about age 65 and 85.

Budgets for those aged 65-84

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Source: ASFA (26/05/2023)

Weekly budget breakdown for those aged 65-84

Budgets for those aged 85+

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Source: ASFA (26/05/2023)

Weekly budget breakdown for those aged 85+

A more modest lifestyle can be cheaper but at what costs to the quality of retired life?

What are the average super balances for Australians by age?

Here’s how much are the average super balances of Australians based on their age, according to data from the Australian Prudential Regulation Authority (APRA).

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Source: www.canstar.com.au – 30/05/2023 (from table, above).

As you can see, there is a large difference between men and women when it comes to super balances.

→ Read more: How can women maximise their retirement savings?

How do I boost my super so I can retire comfortably?

If you’ve found your super balance isn’t on track for your retirement plans then there are a few things you can do to help bump it up.

Check for any lost super you may have forgotten about, possibly from a previous job.

If you had what’s known as an inactive low-balance super account, generally one less than $6,000 that hasn’t been added to for the past 16 months, then your super fund is required to pay that money to the Australian Taxation Office (ATO) to protect the account from getting eroded by fees.

The ATO says it will then try to consolidate the money into your active super account. If you’ve several it will pick one based on the relevant super laws. If there is no eligible super account to pay the money to then it will determine where it’s held for you.

If the amount in the inactive account is less than $200 or you’re aged 65 and over, the ATO may make a direct payment to you.

Whatever happens, the ATO says it will try to get in touch with you to explain what has happened, so it’s important to always keep your contact details up-to-date.

You can make additional contributions to your super, such as through salary sacrificing from your pre-tax earnings if that’s an option, and other options if you’re on a low income.

You should regularly give your fund a quick health check to make sure you’re in the right investment profile for your needs, check the level of insurance you have and be sure you’re not paying too much in fees.

You should also check 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).

If you’re in a MySuper fund you can use the ATO’s comparison tool to check the fees and whether a super product is underperforming based on APRA’s testing.

Think about any other opportunities you could take advantage of to boost your super balance. It might be a good idea to seek some professional independent advice.

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