Let’s start with what super balance is average for your age. Note – average doesn’t meanideal,but I will get into that. These are the real,age-based super amounts the Australian Taxation Office has most recently reported.
For males,the average super balance at age 18-24 is $8148,at 30-34 it’s $56,344,at 40-44 it’s $139,431 and at 50-54 it’s $246,955. What is the typical amount men retire with at age 65 to 69? It’s $453,075.
For women though,you have probably guessed that pay and parenting inequities (I’m generalising butgenerally it is also still true) see female’s respective amounts lower. We are talking $7328 at age 18-24,$46,289 at 30-34,$107,538 at 40-44 and $182,167 at 50-54.
At retirement between 65 and 69,$403,038 is today’s norm for women. So,is a nest egg of this size sufficient for a sweet retirement,for anyone?
The short answer:no.
The target end-balance for a single is $595,000,we’re told by the Association of Superannuation Funds of Australia,and $690,000 for a couple. That is the amount it calculates gets us over the line to a
If you work the super system,females’ lifestyles in retirement can easily equal men’s.
You must note,though,that these figures assume you own your home by retirement,and that you draw down progressively on all your funds and so,over time,get more age pension.
What about if you are just 40,though? What is your super trajectory?
The good news,if you are a man,is that the average will swell your super nest egg to an amount that,by retirement at age 67,is supposed to leave you set for life. That supposedly sufficient balance is $618,520,well clear of the $595,000 target.
For a 40-year-old woman,however,the forecast amount falls short. The average is heading for just $516,307. These are numbers I’ve crunched on
Averages apart,your income is key. My modelling uses a 40-year-old male earning $1981.30 a week or $103,028 a year,as per average weekly ordinary earnings data from the Australian Bureau of Statistics.
The average female of the same age,meanwhile,makes just $1741.90 a week or $90,579 a year.
How do you compare there?
This is the super situation for average 40-year-olds. You can plug your own income,super balance today and any additional contributions into the Moneysmart calculator,and see where your forecast sits.
You can also tailor the results for your fund’s fees,insurance and performance,to make them even more accurate (the default inputs are sensible if this is all a bit much,though,as they are based on Treasury’s long-term retirement income models).
For couples in particular,I also recommend usingThis is the first of its kind to show where you might need to apply the strategies available to equalise your super balances because one of you could breach the $1.9 million balance transfer cap. Having one small super balance and one giant companion balance is not tax-effective.
So what is the fix for females? The calculator reveals the typical woman could rescue her retirement with a salary sacrifice of just $210 a month. Remember,these sacrifices are before tax so you won’t be that much out of your pocket.
There may well be that work break to care for kids,alluded to above,would depress the figures further.
Anyone on below $58,445,at any time,should also be making after-tax contributions of $1000 a year to get
If your income drops below $40,000,you should also avail yourselves of,if relevant and realistic. If you work the super system,females’ lifestyles in retirement can easily equal men’s.
Nicole Pedersen-McKinnon is the author of. Follow Nicole on, or.
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