How does your super compare?
19 November 2018
As of June 2017, more than 14.8 million Australians had a super fund, according to the Australian Tax Office (ATO). While that represents over half of the total population, only 42% of us know our exact super balance, suggests research conducted by finder.com.au.
If you're at the phase in life where you still have some working years ahead, but you're starting to look to the future and the prospect of retirement, you might be wondering how your super compares to others your age.
Let's explore average super savings by age, and how they relate to the recommended amount you should aim for by retirement.
Do you know how your super balance compares to others your age?
How much super should I have?
If you find yourself asking 'How does my super compare?', this ATO data shows the median super account balance by age and gender:
It's worth bearing in mind that these figures are just a midpoint, and of course everyone's personal situation is different. However, it's useful to have an understanding of how your super balance stacks up against your peers.
But what should you be aiming for?
It's useful to have an overall goal for your retirement savings.
How much will I need to retire?
Again there is no set in stone amount for how much you need to have in your super accounts when you retire, but there are guidelines.
According to a retirement standard established through research by the Association of Superannuation Funds of Australia (ASFA), a couple should aim to have $640,000 in retirement savings, whereas a single person would require $545,000 to have a comfortable lifestyle.
In this standard, a comfortable lifestyle is defined as one in which a retired person in good health could enjoy a wide variety of recreational and leisure activities, as well as a decent living standard.
In case you're panicking upon seeing these figures, it's important to remember that retirement savings encompasses more than just your super, and includes other income sources such as the Federal Government Age Pension. That said, investing in your super is a crucial step towards planning for your retirement.
Is your super in need of a boost?
How can I grow my super?
If you're starting to think more seriously that you want to boost your super balance, there are a few steps you can take to get it back on track:
- Consolidate your accounts: If you've held multiple jobs during your working life, or even if you haven't, there's a good chance you have savings split across different super accounts. As well as making it harder to keep track of your money, each of these funds will have its own fees. By putting all your super into one account, you reduce the number of fees you pay. However, it's worth considering how this might affect your insurance cover, and whether the funds you're considering closing have termination fees. If you’re an LGS member, you can search and consolidate your super accounts in just a few clicks.
- Look for missing super: A common byproduct of having multiple accounts is missing super. If you never told previous employers where you want them to pay your super contributions, it's likely they put them into the fund associated with the business, so you may have more savings than you think.
- Research alternative investment opportunities: You should seek advice from your super fund before making any significant changes, as they will be able to advise you on possible investment opportunities, for example by switching to a more growth-oriented option.
- Be aware of other available schemes: Initiatives such as government co-contributions, where the Federal Government pays up to 50 cents for every $1 you invest in your super, or voluntary salary sacrifice arrangements, are other possibilities that some individuals may be eligible to take advantage of.
Whatever your age, or financial situation, it's never too late to start growing your super, and LGS is here to help. We can give you the financial advice needed to get your super back on track, and find sustainable ways to increase your retirement savings. To find out more, get in touch with our team today.
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