Young Australians told not to fret lower super balances
Australians are retiring with more money in their retirement accounts than ever before; but many, especially women, fall short of recommended retirement standards.
But an advocacy group says young people shouldn’t panic given employer contributions rising to 12 percent.
New Research by ASFA, the peak body of the super sectorIt reveals that the average retirement balance is $172,384, and up to $420,934 for those ages 65-69.
ASFA chief executive Mary Delahunty said the rising balances were “great news”.
“Increasing the superannuation guarantee to 12 per cent, combined with strong investment returns from super funds, means Australians have more saved for retirement than ever before,” he said.
A deeper dive into the analysis, based on the biennial release of Australian Taxation Office data, shows many have taxes well below average.
The midpoint or median super balance is just $60,037; Those in the 65-69 age group have $208,143 on hand, which is well below ASFA’s comfortable living standard.
Super Consumers Australia deputy chief executive Katrina Ellis said people “shouldn’t think they’re in a bad situation if they don’t have $172,000”.
“Half the population has $60,000 or less,” he told AAP.
He doesn’t want to see young Australians pumping money into retirement, struggling with basic needs while fearing for their quality of life later.
ASFAs “comfortable” standard of living $690,000 for retired couples and $595,000 for singles.
According to these figures, less than 30 per cent of Australians retire “comfortably”.
Ms Ellis said Super Consumers Australia’s criteria were lower The midpoint of what retirees actually spend is $421,000 for couples and $310,000 for individuals.
“Super funds want people to have more money in their super accounts because it helps super funds,” he said.
“We are concerned that (the ASFA standard) is unachievable… we think it leads people to think they have to save, save, save and sacrifice quality of life while working.
“We’re not forcing people to save 12 per cent of their salary (at a super rate), which is probably enough for most people.”
The distribution of balances by gender shows that women still save less in retirement and retire with less than men.
The average male account had $68,568 and the average female account had $54,349.
Women hold 43.6 percent of super savings; this rate was 41.9 percent in 2018.
A number of recent interventions, including social tax relief for low-income earners, pensions for paid parental leave, and making pension rights mandatory for earnings below $450 a month, would further narrow the gender gap.
“The reality is that the gender gap still exists and the pace of closing is still very slow,” Ms Ellis said. he said.
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