If your bank balance is looking a bit dreary, chances are what’s in your super fund could come as welcome news. See how you fare against others your age.
If you’re like 56% of young Aussies, you probably couldn’t say exactly how much money you have in super, but according to the Association of Superannuation Funds of Australia, what you’ve got saved may easily outweigh what’s in your everyday bank account1 (now, that’s welcome news).
Meanwhile, before your eyes glaze over and you think, well that’s money I generally won’t be able to touch for another couple of decades (true that!), below is some info you may like to know now, including how you fare against others your age when it comes to what you’ve saved in super to date.
How much do other young people have in super?
Here is the average super balance by age, looking across the board and breaking it down by gender2.
Age |
Across the board |
Men |
Women |
|
20 to 24 |
$5,501 |
$5,924 |
$5,022 |
|
25 to 29 |
$21,372 |
$23,712 |
$19,107 |
|
30 to 34 |
$38,386 |
$43,583 |
$33,748 |
|
35 to 39 |
$56,715 |
$64,590 |
$48,874
|
How much money will I need anyway?
According to September 2018 industry figures3, here’s what money you’d need each year to fund a comfortable or modest lifestyle if you were 65 and looking to retire today.
Comfortable lifestyle
Individuals would need an annual budget of $43,200 and couples an annual budget of $60,843 to fund a comfortable lifestyle, assuming they own their home outright and are relatively healthy.
A comfortable lifestyle in this instance assumes a retiree would be involved in a broad range of leisure and recreational activities and have a good standard of living.
Modest lifestyle
To live a modest lifestyle (which is considered better than living off the government’s Age Pension, but still only able to afford fairly basic activities), individuals and couples would need an annual budget of $27,595 and $39,666 respectively, assuming they own their home outright and are relatively healthy.
If you’re wondering how that actually compares to the government’s Age Pension, the maximum Age Pension rate is currently $23,824 annually for individuals and $35,916 annually for couples4.
Quick tips to help maximise what you’ve got
While you may be prioritising putting any additional money you have toward other things (and understandably if holidays, getting your own place or buying a new car is on the horizon), here are some other things you could do to ensure what you have already saved in super doesn’t dwindle.
1. Check your balance and your investment options
Even if you’re not part of the small percentage of young Aussies, who check their super balance daily5, it’s still worth a look every now and then to ensure you’re across what (don’t forget) is your money.
As for what investment options you’re invested in, this is also worth looking into as it could make a huge difference to your balance at the end of the day, as generally you’ve got the power to say what level of risk you’re willing to take on to potentially generate a higher profit.
2. Find your lost super (or let us do it for you)
You might have lost track of some of your super if you’ve changed jobs, particularly if your employer has put contributions into a new fund and you haven’t carried over what you saved in an old one.
3. Consolidate your funds into one if you have many
More than 60% of young Aussies have multiple super accounts6, and while you might be thinking, so what?, multiple accounts often mean multiple sets of fees and charges.
With that in mind, rolling your accounts into one could be worthwhile as it may save you hundreds of dollars a year or thousands over many years. Just be sure to look into any exit and withdrawal fees, and if there are any features and benefits you might lose if closing a particular account.
4. See if you’re paying for insurance
Having insurance inside super may be beneficial for you, but you should review what you’ve got, as more than 25% of people under age 29 are unsure whether they have cover, let alone the right type7.
While there may be benefits (for instance, insurance cover may be cheaper, and you won’t be dipping into your take-home pay as insurance premiums are deducted from your super savings), cover may be limited and paying premiums out of your super could decrease your balance if your super is not being offset by contributions.
Keep in mind
While retirement might seem like a lifetime away, remember – the more informed you are about super from a young age, the better off you may be down the track.
If you seek further assistance please contact us on 02 4605 0350
1, 5, 6, 7 ASFA Media Release: More money in super than in the bank – young Australians’ hidden super wealth
2 ASFA Report: Superannuation account balances by age and gender 2017 page 9,10
3 ASFA retirement standard table 1
4 Department of Human Services – Payment rates for Age Pension table 1