For the current generation of soon-to-be retirees and retirees, their super accounts aren’t quite super enough.
Everyone talks about how much we need to retire in comfort in Australia. But rarely do we stop and discuss the reality of how much or how little money people really have in their superannuation fund at retirement age.
Yet, the Australian Tax Office’s latest superannuation statistics for the 2020/21 year show that the average superannuation balance for people aged between 55 and 59 is $277,327. For those aged 60-64 it sits at $361,539, 65-69 it is $428,738. The average age of retirement in Australia is between 64.5 years for women and 65.3 for men right now. But preservation age, or the age you can actually start drawing down from your superannuation fund either through a transition to retirement or retirement pension, depending on your work status, is now 60 years of age. And pension age is firmly planted at 67 years, meaning many people will have to stay in the workforce until then, in the current generation.
Given just how much Aussies have tied up in their properties after five decades of property price escalation, this is a powerful opportunity.Many people can use the last ten years before retirement to significantly improve their super balance, simply by contributing more to super in these years, taking advantage of concessions and non-concessional contributions. The earlier you make contributions, the longer time they will have in super to compound, so don’t delay.
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