Planning for the Future
The Community Services Industry is focused on planning for the future, the workforce, to meet reform and the NDIS, but are you also making sure that you plan for your own future? A commonly-Googled search when it comes to money and retirement is how much super should I have?
In this blog, we have some great advice from the QSuper team to help you understand how to plan now for the retirement you want.
Average super balances
So how much super should you have? Or in other words, what are average superannuation balances? A source of reputable information is Australian Bureau of Statistics (ABS)1.
It shows that the average superannuation balance in 2017-18 for people aged 15 and over was $168,500 for men and $121,300 for women.
These figures are well up on the equivalent figures for two years’ earlier, particularly for women.
Average balances in 2015-16 for people aged 15 and over was $158,700 for men and $105,400 for women.
In fact, according to the ABS, increases in superannuation balances (along with long term growth in house prices) were a driver of average household wealth passing the $1 million mark in 2017–18.
Super balances by age
Let’s look at some average superannuation balances at different ages.
For Australians aged 25 to 34:
2017-2018 average balances – $41,700 for men and $31,600 for women.
2015-2016 average balances – $39,700 for men and $33,200 for women.
For Australians aged 35 to 44:
2017-2018 average balances – $100,300 for men and $69,300 for women.
2015-2016 average balances – $95,200 for men and $68,200 for women.
For Australians aged 45 to 54:
2017-2018 average balances – $196,400 for men and $129,100 for women.
2015-2016 average balances – $186,100 for men and $118,500 for women.
For Australians aged 55 to 64:
2017-2018 average balances – $332,700 for men and $245,100 for women.
2015-2016 average balances – $321,600 for men and $203,700 for women.
For Australians aged 65 to 74:
2017-2018 average balances – $417,900 for men and $378,600 for women.
2015-2016 average balances – $446,600 for men and $329,700 for women.
For Australians aged 75 and over:
2017-2018 average balances – $366,200 for men and $270,300 for women.
2015-2016 average balances – $268,200 for men and $227,600 for women.
The cost of retirement
In 2018 the Association of Superannuation Funds of Australia (ASFA) calculated that a comfortable retirement for a single person requires a lump sum at retirement of approximately $545,000. For a couple, the equivalent lump sum is $640,000.2
Differences between men and women
Women lag behind men in superannuation for a combination of reasons.
ASFA’s Women’s Economic Security in Retirement report3 outlined these reasons as:
- broken working patterns
- the gender pay gap
- increasing casualisation of the workforce
- longevity risk
- structural issues in the superannuation system
- adequacy of superannuation overall
- domestic violence
- practical issues with family law and superannuation splitting.
There are things you can consider doing right now to help reduce any gender gap you may have.
“Contributing to your super while you’re still working could also help you pay less income tax, potentially putting more in your pocket at tax time while boosting your retirement savings.” Chief of QInvest, Kim Hughes
Making your money work hard
While those who are younger have an advantage over those who are older, the message is clear.
No matter what your age, or gender, it’s important to make your super work hard for you.
You can use key milestones in your life, such as starting a job, getting married, having a baby to review your super.
In your 20s, when you start your first job, do a budget, start saving, and check how much money is going into your super fund. Also, learn what to look for when choosing the right super fund for you.
If you’re in your 30s, check out all the ways you can grow your super, from salary sacrifice to spouse contributions and tax offsets.
In your 40s, you might like to see a financial adviser and check whether you’re on track for a comfortable retirement. It can also be a good idea to check your fees and costs and see that your contributions to your super fund are not being eroded by high charges.
If you’re in your 50s, coming closer to retirement, you may want to learn about a transition to retirement strategy.
If you’re about to retire, here’s a checklist of the things to do in the year leading up to your new lifestyle. Also learn when you can access your super, and learn more about QSuper’s award-winning Retirement Income Account.
If you are a retiree, remember to take some simple actions to protect your super from fraud.
Open a QSuper account today
Regardless of your age, planning your best future means being invested in your super starting today. If you decide QSuper is the best super fund for you, join half a million Australians who are already enjoying the QSuper feeling.
1. Household Income and Wealth, Australia, 2017-18, Australian Bureau of Statistics. Sourced July 2019.
3. Women’s Economic Security in Retirement, ASFA. Published Feb 2018