Yahoo Finance Exact amount you need to retire in Australia
A money expert is urging Aussies to engage with their super now before it's “too late”.
As the cost-of-living crisis continues to squeeze household budgets, millions of Aussies are now starting to question whether they'll have enough super to fund their retirement.
Shocking findings from new research reveal that nearly a quarter of Aussies have admitted they won’t have enough money in their superannuation fund or other investments to get by.
Another quarter of respondents to the Finder survey said they weren’t sure whether they would have enough of a nest egg once they left the workforce. One in 10 said their super balance was too low but that they’d have enough through other investments to get by.
Also read: Super stash: Your retirement forecast vs what you need
Also read: how much superannuation do you need to retire in Australia?
So, exactly how much superannuation do you need to retire in Australia?
How much superannuation do you need?
Aussie couples need to have $690,000 in superannuation savings to fund a comfortable retirement, according to the Association of Superannuation Funds of Australia (ASFA), while singles need $595,000.
This is well above the current average super balance of $324,525 for people aged 60 to 64 years old.
ASFA said couples would need $70,806 per year to be comfortable, while singles would need $50,206 per year.
Are you worried about not being able to retire? Share your story with tamika.seeto@yahooinc.com
Tips to increase your super balance
Finder money expert Sarah Megginson said it could be a sad case of “too little too late” for many Aussies who may only realise their super balance had fallen short by the time they reached retirement age.
She’s urging Aussies to engage with their super now, and has offered the following checklist.
1. Check and consolidate
First, check how much money you have in super and consolidate your funds. You can do this online through the ATO via myGov.
“You pay fees for each fund you have – it’s like having your savings split across three savings accounts and paying account-keeping fees on all of them,” Megginson said.
“It makes so much sense to bring it all together and spend less on fees, so more money stays in your name, working towards building your wealth.”
2. Top up your balance
If you are in a position to do so, Megginson also recommended contributing to your super balance through salary sacrificing.
“Any income earned within your super is capped at a maximum tax rate of 15 per cent per annum. If you currently pay say 32.5 per cent tax, you’re ahead immediately,” Megginson said.
“For instance, if you salary sacrifice $1,000 over 12 months, you’d pay $150 on that income and $850 will go to super where it will be invested for your future. Otherwise, you’ll pay $325 tax on that money and have $675 in your bank account.
“Obviously, once you put the money into super, you can’t get it back out, so start small. But even $100 a month would make a difference thanks to compounding interest.”
3. Check your super fund
Lastly, make sure your super fund is offering you good value for money. Check the fees, long-term returns and investment strategy and seek professional advice if you need.
“Make sure you aren’t stuck in a fund charging exorbitant fees. And check regularly that your employer is paying your 11 per cent Superannuation Guarantee contributions on time,” Megginson said.
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