Fresh data has revealed how much Australians may need tucked away in superannuation to fund a comfortable retirement.
According to the latest report from the Association of Superannuation Funds of Australia, average super balances have climbed to record levels, while the share of retirees depending on the Centrelink age pension has fallen to its lowest point.
The mean superannuation balance for Australians aged 15 and over is now $202,644 for men and $164,206 for women, marking a rise of more than $10,000 over the past year.
ASFA’s figures show a single homeowner would need at least $630,000 in super to retire comfortably, while couples would require a combined balance of $730,000.
To stay on course, a 30-year-old would need about $70,500 in super today, while a 40-year-old would need $178,000, a 50-year-old $313,500, and a 60-year-old $496,500.
ASFA estimates the annual cost of a comfortable retirement is currently $55,923.
‘ASFA estimates that a 30-year-old today, with $30,000 in their super, earning the median wage will retire with around $620,000 in super, on par with the $630,000 needed for a comfortable retirement,’ the report states.
Among the 1.32 million Australians aged 60 to 64 who hold superannuation, the mean balance stands at $371,379, while the median balance is $203,326.
ASFA CEO warned Mary Delahunty warned against legislation that would allow Australians to draw on their super early
Millions of workers are currently unable to access their super, despite a cost-of-living crisis crippling households
ASFA figures show how the nation tracks when it comes to superannuation
Almost five in ten Australians aged 60-64 currently retire with enough savings to meet the ASFA comfortable retirement standard, a figure that is expected to rise as the system matures.
‘Growing account balances are the product of two things: the fact that the superannuation guarantee has been increasing, and the strong investment returns that super funds have delivered to their members over a sustained period of time,’ ASFA CEO Mary Delahunty said.
‘As more people reach retirement having had the benefit of double-digit compulsory super for most of their lives, we’ll see the system come to full maturity, with most retirees living on an income well above what Centrelink can sustainably provide as our population ages.’
Around 56 per cent of over-95s receive a full or part Age Pension, down from 70 per cent in 2012.
Treasurer Jim Chalmers declared the next election would be a ‘referendum on superannuation’ and warned that early access had the potential to ‘absolutely decimate the retirement income of millions of Australian workers’.
‘One of the most important features of our superannuation system is … this idea that, with compounding interest over time, Australian workers can access the decent retirement incomes that they need and deserve after a lifetime of work,’ he said, speaking on Sunrise.
The Treasurer’s comments came after One Nation leader Pauline Hanson labelled the current system ‘broken’ and called for workers to be able to access their retirement funds early to help ease cost-of-living pressures.
Liberal frontbencher Andrew Bragg – a long-time critic of the superannuation scheme – also called for the abolition of the compulsory super and claiming that the long-running program has ‘not really helped many people get off the pension’.
Treasurer Jim Chalmers said he is gearing up for a ‘referendum on superannuation’ at the next federal election
One Nation leader Pauline Hanson believes workers should be able to access their super early
However, Ms Delahunty said early access would ‘hurt’ Australians, with people electing to access their nest egg early potentially opening themselves up to two large tax bills: both when they draw down early on their fund, and again when they retire.
‘Then you’re left more dependent on Centrelink, and tomorrow’s taxpayers foot the bill,’ she said.
‘The super system is working for retirees and the federal budget. Its success is because that money stays locked away for retirement.
‘Super isn’t a pot of money to be used to fix other problems like housing affordability and cost of living. Those issues need their own policy solutions, not the unfair and uncreative option of tapping into people’s retirement savings.’
A recent Finder survey of 1,011 Aussies found that 24 per cent had withdrawn money from their super before retirement, with medical expenses the most commonly cited reason. More than half surveyed said they didn’t regret the decision.
Australians may only draw down on their super in special circumstances, such as cases of severe financial hardship when facing terminal illness, or on compassionate grounds.
