Planning for a comfortable retirement starts long before the day you hang up your boots, and understanding where you stand financially at age 50 is crucial. In Australia, superannuation (or “super”) plays a major role in supporting retirement, especially as the age pension is unlikely to be sufficient for a comfortable lifestyle. According to The Motley Fool Australia, it’s essential to know how your super balance compares to the national average to assess if you’re on track.
What the Numbers Reveal About Your Super at 50
If you’ve just hit the big 5-0 and are wondering how your super stacks up, the average Australian superannuation balance for those in their late 40s and early 50s may provide some guidance. For men aged 45-49, the average super balance is $180,958, while women in the same age group have an average of $136,667. For those in the 50-54 age bracket, the averages rise to $237,084 for men and $176,824 for women.
This puts the average 50-year-old’s balance somewhere between $209,000 for men and $156,000 for women, which is a solid foundation to build on. However, these are just averages, and depending on your lifestyle and retirement goals, these numbers may need to be higher. Understanding where you stand compared to the average can give you a clearer picture of whether you’re on track for the retirement you envision.
How Much Super You Need for a Comfortable Retirement
So, what does a “comfortable” retirement look like? The good news is that, based on the latest estimates, the super balances of $209,000 for men and $156,000 for women are within reach of a comfortable lifestyle in retirement. According to the Australian Federal Safety Authority (AFSA), a $595,000 super balance is estimated to be necessary for a 67-year-old to fund a comfortable single-person retirement lifestyle.
This comfortable retirement standard encompasses all the essentials, from groceries and transport to home repairs, as well as private health insurance. It also allows retirees to enjoy activities like exercise, leisure, and occasional dining out. Importantly, it includes the opportunity to remain connected with family and friends both virtually and in person, with an annual domestic trip and one international trip every seven years. These aspects ensure that your post-work years are not just about getting by but about maintaining a high quality of life.
What If You’re Behind on Your Super?
If your super balance is lagging behind the average, don’t panic—there’s still time to catch up. You have around 17 years until the age pension kicks in at 67, which is plenty of time to harness the power of compounding and make the most of regular super contributions. Starting with a balance of $156,000 (for women) or $209,000 (for men) and adding $750 per month with an average 9% annual return, you could end up with $1.02 million (for women) and $1.25 million (for men) by the time you’re 67. This would place you comfortably above the $595,000 benchmark set by AFSA.
If your super balance is lower than these starting points, consider increasing your contributions. Even small additional amounts can add up significantly over time. It’s also worth reviewing the performance of your super fund regularly to ensure that you’re not underperforming compared to other options. The extra effort now could make a world of difference in your retirement years.
