What is the average super balance?
While there’s a number of factors that can and will affect individual super balances, identifying an average balance for your age range can provide insight into your current performance. Benchmarking against peers can offer guidance for those questioning ‘how much super should I have?’.
The Association of Superannuation Funds of Australia regularly publishes tables comparing super balances by age. Data as of June 2021 offers a comparison of male and female average super balance over various age categories.
| Age | Average male account balance $ | Average female account balance $ |
| 18-24 | 8,148 | 7,328 |
| 25-29 | 25,981 | 23,429 |
| 30-34 | 56,344 | 46,289 |
| 35-39 | 95,937 | 75,785 |
| 40-44 | 139,431 | 107,538 |
| 45-49 | 190,716 | 142,037 |
| 50-54 | 246,955 | 182,167 |
| 55-59 | 316,457 | 236,530 |
| 60-64 | 402,838 | 318,203 |
| 65-69 | 453,075 | 403,038 |
How much super do I need to retire?
Data sourced from ASFA’s consumer website SuperGuru provided the following approximate super value, required by age, to reach the ASDA Comfortable Standard balance at age 67.
| Age (years) | Target balance $ (recommended for a comfortable retirement with a balance of $595,000) |
| 20 | 5,500 |
| 25 | 18,000 |
| 30 | 59,000 |
| 35 | 101,500 |
| 40 | 156,000 |
| 45 | 213,000 |
| 50 | 281,000 |
| 55 | 361,000 |
| 60 | 453,000 |
| 65 | 549,000 |
It’s worth noting the difference between average figure and required figure and then assessing if you have the means to increase your super balance. You can increase your super balance by using a few methods:
- Job progression (impact of salary on super contributions)
- Additional contributions
- Reducing fees or costs
The gender pay gap
There’s no denying gender plays a part in average super balance. Women, on average, tend to have lower super balances compared to men. This imbalance can be attributed to differences in salary levels, types of employment, and breaks from the workforce for caregiving responsibilities. Efforts to bridge this gap include advocating for equal pay and policies that support women during maternity leave.
Impact of salary on super contributions
Your salary plays a crucial role in determining the amount of super contributions you receive.
The super guarantee (SG) is currently set at 11% of your earning and will increase to 12% by 2025. Individuals with higher salaries naturally accrue more superannuation over time.
The disparity between super contributions from pay will compound over the years. This highlights the importance of equitable pay. When considering your super balance, it’s important to make sure you’re being compensated fairly for your job role or consider if there’s any job progression or negotiation to increase your salary. This will aid in increasing up your super balance over time.
Additional contributions
Apart from employer contributions, individuals can boost their super balances through voluntary contributions. These can take various forms, including concessional contributions, non-concessional contributions, and spousal contributions. Making additional contributions is a strategic way to supplement your super and potentially catch up if you’re lagging behind peers in balance accumulation.
Reducing superannuation costs and fees to optimise returns
The returns on your super investments and the fees you pay have a significant impact on your overall balance. Optimal asset allocation and minimising fees are key strategies to maximise long-term returns.
Younger individuals with more time until retirement can afford to take on higher risk by allocating more funds to growth assets like shares and property. Conversely, as retirement approaches, shifting towards safer, defensive assets becomes prudent.
More important than relying on the market to generate returns however, is the need to keep fees low. Fees are like termites in a super fund and keeping fees low is essential. Even minor differences in fees can compound into substantial variations in retirement savings over time. It’s important to weigh up the expected returns (although past performance is no indication of future returns) alongside the fees a fund charges, before deciding to join them. Additionally ‘super retirement bonus’ may play a part in your decision making or the structure of the super fund you may choose to invest in.
Conclusion
In conclusion, understanding the key factors that impact super balances is the first step towards securing a financially stable retirement for yourself. Optimising your salary package, considering making voluntary contributions, and managing investment risk and fees are all essential components. By actively addressing these factors, you can work towards narrowing the gap and ensuring a comfortable retirement for yourself.
While the question of “how much super should I have?” may seem daunting, gaining insights into the average super balance in Australia and determining the amount needed for a comfortable retirement are crucial. This knowledge provides clarity and empowers you to take proactive steps towards achieving your retirement goals.
