A growing number of Australians are confronting the prospect of entering retirement without sufficient savings, as superannuation balances remain well below recommended levels. According to a Finder survey, around 4.3 million adults – roughly 20% of the population – believe they will not have enough to support themselves financially in later life.
The findings underline a broader concern over financial security in retirement, as rising housing costs and stagnant superannuation growth leave many households struggling to build an adequate safety net. The Association of Superannuation Funds of Australia (ASFA) estimates that a single person requires $595,000 and a couple $690,000 to fund a comfortable retirement, yet the median balance remains far from this target.
Housing Pressures and Low Balances Create a Widening Gap
While ASFA’s benchmark for retirement has been consistent, Australian Taxation Office (ATO) data reveals a stark disparity between what is needed and what most people have saved. The median superannuation balance is only $60,037, while the average sits at $172,835 – both figures falling significantly short of ASFA’s guidance. This gap is compounded by the growing financial burden of housing.
Finder’s survey shows that around one in five homeowners devote more than half of their monthly income to mortgage repayments, while three-quarters of those with a mortgage spend more than a third of their income on housing costs. With such a large proportion of earnings tied up in property, many Australians are left with limited capacity to make meaningful contributions to their superannuation, placing them at risk of financial strain once they retire.
According to Pascale Helyar-Moray, Finder’s superannuation expert, “retirement may be financially out of reach for a large share of Australians,” adding that insufficient savings could leave millions relying on limited support from the Age Pension.
Calls for Proactive Financial Strategies
Faced with this shortfall, experts are urging Australians to take a more proactive approach to building retirement savings. Helyar-Moray advises salary sacrifice contributions as one of the most effective ways to bolster super balances. “Super earnings below $30k are taxed at a maximum of just 15 per cent, which means salary sacrificing into super could help grow your wealth while also lowering your tax” she said, according to Finder.
She also emphasised the importance of reviewing fund performance, minimising fees, and ensuring employers are paying the mandated 12 per cent Superannuation Guarantee. Regular monitoring, she noted, could prevent workers from remaining in poorly performing funds that erode long-term retirement savings.
For many Australians, the prospect of retirement will increasingly depend on early planning and disciplined contributions. Without such measures, the gap between what is needed and what is saved risks leaving a significant portion of the population financially vulnerable in their later years.
