What’s the average super balance for your age?
Like many things when it comes to your finances, the amount of super you need to live out your retirement dreams depends on your personal circumstances and the goals you have for your time after work.
How to take super out of the too-hard basket
Until you’re on the home stretch with just a couple of years to go, retirement can seem more like an abstract concept rather than something you’ll actually reach. That feeling can then make it difficult to want to put time into understanding your super and how it’s going to work for you in retirement.
We recently conducted some research to understand how our members feel about super and preparing for retirement, and we heard the same kind of things over and over:
- I’m too young to think about retirement yet
- Super is in the too-hard basket
- I have other financial commitments
- It’s hard to know the ‘magic number’
Does any of that sound familiar? If any of those thoughts resonate with you, don’t worry – there are a lot of quick, easy things you can do to get in control of your super, no matter your situation.
If you think you're too young...
You don’t need to have your whole retirement plan mapped out when you’re 31, 41, or even 51, but there are a couple of things you can do to set yourself up properly now so that when you do get closer to planning age, everything is in place and ready for you to go.
After all, as the saying goes, the best time to plant a tree was 20 years ago, the next best time is now. If you can, why not plant the tree now for future you 20 or even 40 years down the line?
Here are a few things to do to set yourself up:
- Combine your super: By combining all your super into one account, you could save on fees and charges. This means more of your money stays invested in the super system, growing over time to support your future savings and lifestyle.
- Review your investment options: The way your super is invested can have a significant impact on your balance at retirement, so it’s important to make sure your investment options meet your changing needs and lifestyle goals.
- Consider your insurance needs: If you’re over-insured, paying premiums for cover you don’t need can deplete your super balance. If you’re under-insured, you may not have enough to protect your family in the event of an unfortunate event.
- Understand your potential entitlements: If you’re eligible for any government offsets and co-contributions, then you should consider taking advantage of them.
If you’re worried about the magic number…
The good news is that there isn’t actually a magic number.
While the $1 million figure often comes up, rest assured there’s no official decree that says the magic million is a must.
Like many other aspects of super, how much super you need in retirement depends on you and your personal circumstances – in particular, what kind of lifestyle do you personally want to live in retirement?
In other words, what does your super actually have to be able to pay for?
As a rough guide, the Association of Super Funds of Australia (ASFA)’s Retirement Standard estimates that a couple will need a lump sum of $640,000 in combined super savings at retirement in order to enjoy a ‘comfortable’ retirement. A single person, meanwhile, will need a lump sum of $545,000 in super savings.
A ‘modest’ lifestyle will require a lump sum of $70,000 in super savings at retirement.
Our retirement income calculator can help you play with different scenarios to see what kind of income you could have in retirement.
Was this helpful?
We're here to help
If you need help with making a decision about your super, you can get simple advice over the phone or face to face. It’s included as a part of your membership so there’s no extra cost.