Is your superannuation balance higher than your postcode average?

The Advertiser

5 days ago

Four Hunter postcodes have a median superannuation of more than $100,000, and a surprising area has topped the list, according to recent Australian Tax Office data.
The 2282 postcode topped the Hunter list with a median of $117,397, which encompasses Eleebana, Lakelands, and Warners Bay.
The superannuation data is for the 2022-23 financial year, which the ATO recently released as part of its taxation statistics.
The 2291 postcode of Merewether, Merewether Heights and The Junction was the second highest with $109,785, followed by 2305, which includes Kotara East, New Lambton, and New Lambton Heights, at $104,886.
Wangi Wangi rounded out the top four at $103,837.
Despite ranking at 23rd for median, the 2300 postcode for Newcastle, Newcastle East, Cooks Hill, Bar Beach, and The Hill topped the list for average superannuation at $317,597.
University of Newcastle Associate Professor of finance Mia Pham said this was an example of income inequality.
"The 2300 covers inner-city Newcastle, and we can see that this area has a diverse mix of professionals, and we also have students, renters, and retirees," she said.
"So the fact that it ranks high in average superannuation, but low in median tells us there's a wide gap between the top and the bottom.
"It could be that a few individuals have very large super balances. For example, older professionals or those people that have a high income and it can skew the average upward."
The 2291 postcode was second-highest for average at $310,451, while Salamander Bay and Soldiers Point's postcode of 2317 was third highest at $248,851.
Low-socioeconomic areas like Windale were on the other end of the scale. The 2306 postcode had a median superannuation of $17,467 and an average of $51,658.
Associate Professor Pham said factors such as average income, employment and age played a role in an area's superannuation spread.
"Many residents may work in casual or part-time roles, which don't always come with consistent super contribution," she said.
"Areas with a younger population have less time to accumulate the super."
The 2308 postcode, made up entirely of the University of Newcastle campus, had a median super of $1220 and an average of $12,160.
Aboriginal and Torres Strait Islander residents also face systemic barriers to wealth building, Associate Professor Pham said.
"Another thing is the culture and social factor, because some people, let's say, the migrant population, they may have a lower balance because they just recently joined the workforce," she said.
The option to access superannuation during the pandemic was also more commonly used by people who were on lower incomes or in financial distress, creating a further divide, Associate Professor Pham said.
She said the impact of withdrawing super early may be larger than people expect.
"So let's say if a person withdraws about $20,000 at the age of 30, and if that money had stayed and earned a 7 per cent annual return, it could have rolled to over $150,000 by the age of 60, and by the age of 67, it's going to be more than $200,000," she said.
"So you can see that's a huge shortfall and it's entirely due to missing out on decades of compounding.
"I think early withdrawal was something people had to do, but it's going to be a really high price that they have to pay later in life and especially for those who already face the financial disadvantages."
The Association of Super Funds Australia recommends couples need $690,000 to comfortably retire on, while single people need $595,000.
That number assumes the person owns their home and receives some support from the age pension.
Associate Professor Pham said it also varied depending on different factors. For example, people in regional areas may need less than those in capital cities.
The estimate has increased from $500,000 for a single and about $580,000 for a couple 10 years ago.
Associate Professor Pham believed there should be more financial literacy to educate people about superannuation and address economic inequality.
"Many people do not understand how superannuation works," she said.
"They may not understand about the tax benefit of voluntary contributions or the compounding power of the investment.
"Sometimes they just consider super as set and forget. Studies show that many people don't know that the super fund they belong to performed very poorly, and they never change the fund."
The federal government has recently introduced initiatives to help bridge the gap, such as a tax on high-value accounts and a superannuation guarantee on parental leave.
Associate Professor Pham said those initiatives would make a difference, but that she would also like to see more regulation that encouraged employees to make voluntary contributions, particularly those on lower incomes.
Four Hunter postcodes have a median superannuation of more than $100,000, and a surprising area has topped the list, according to recent Australian Tax Office data.
The 2282 postcode topped the Hunter list with a median of $117,397, which encompasses Eleebana, Lakelands, and Warners Bay.
The superannuation data is for the 2022-23 financial year, which the ATO recently released as part of its taxation statistics.
The 2291 postcode of Merewether, Merewether Heights and The Junction was the second highest with $109,785, followed by 2305, which includes Kotara East, New Lambton, and New Lambton Heights, at $104,886.
Wangi Wangi rounded out the top four at $103,837.
Despite ranking at 23rd for median, the 2300 postcode for Newcastle, Newcastle East, Cooks Hill, Bar Beach, and The Hill topped the list for average superannuation at $317,597.
University of Newcastle Associate Professor of finance Mia Pham said this was an example of income inequality.
"The 2300 covers inner-city Newcastle, and we can see that this area has a diverse mix of professionals, and we also have students, renters, and retirees," she said.
"So the fact that it ranks high in average superannuation, but low in median tells us there's a wide gap between the top and the bottom.
"It could be that a few individuals have very large super balances. For example, older professionals or those people that have a high income and it can skew the average upward."
The 2291 postcode was second-highest for average at $310,451, while Salamander Bay and Soldiers Point's postcode of 2317 was third highest at $248,851.
Low-socioeconomic areas like Windale were on the other end of the scale. The 2306 postcode had a median superannuation of $17,467 and an average of $51,658.
Associate Professor Pham said factors such as average income, employment and age played a role in an area's superannuation spread.
"Many residents may work in casual or part-time roles, which don't always come with consistent super contribution," she said.
"Areas with a younger population have less time to accumulate the super."
The 2308 postcode, made up entirely of the University of Newcastle campus, had a median super of $1220 and an average of $12,160.
Aboriginal and Torres Strait Islander residents also face systemic barriers to wealth building, Associate Professor Pham said.
"Another thing is the culture and social factor, because some people, let's say, the migrant population, they may have a lower balance because they just recently joined the workforce," she said.
The option to access superannuation during the pandemic was also more commonly used by people who were on lower incomes or in financial distress, creating a further divide, Associate Professor Pham said.
She said the impact of withdrawing super early may be larger than people expect.
"So let's say if a person withdraws about $20,000 at the age of 30, and if that money had stayed and earned a 7 per cent annual return, it could have rolled to over $150,000 by the age of 60, and by the age of 67, it's going to be more than $200,000," she said.
"So you can see that's a huge shortfall and it's entirely due to missing out on decades of compounding.
"I think early withdrawal was something people had to do, but it's going to be a really high price that they have to pay later in life and especially for those who already face the financial disadvantages."
The Association of Super Funds Australia recommends couples need $690,000 to comfortably retire on, while single people need $595,000.
That number assumes the person owns their home and receives some support from the age pension.
Associate Professor Pham said it also varied depending on different factors. For example, people in regional areas may need less than those in capital cities.
The estimate has increased from $500,000 for a single and about $580,000 for a couple 10 years ago.
Associate Professor Pham believed there should be more financial literacy to educate people about superannuation and address economic inequality.
"Many people do not understand how superannuation works," she said.
"They may not understand about the tax benefit of voluntary contributions or the compounding power of the investment.
"Sometimes they just consider super as set and forget. Studies show that many people don't know that the super fund they belong to performed very poorly, and they never change the fund."
The federal government has recently introduced initiatives to help bridge the gap, such as a tax on high-value accounts and a superannuation guarantee on parental leave.
Associate Professor Pham said those initiatives would make a difference, but that she would also like to see more regulation that encouraged employees to make voluntary contributions, particularly those on lower incomes.
Four Hunter postcodes have a median superannuation of more than $100,000, and a surprising area has topped the list, according to recent Australian Tax Office data.
The 2282 postcode topped the Hunter list with a median of $117,397, which encompasses Eleebana, Lakelands, and Warners Bay.
The superannuation data is for the 2022-23 financial year, which the ATO recently released as part of its taxation statistics.
The 2291 postcode of Merewether, Merewether Heights and The Junction was the second highest with $109,785, followed by 2305, which includes Kotara East, New Lambton, and New Lambton Heights, at $104,886.
Wangi Wangi rounded out the top four at $103,837.
Despite ranking at 23rd for median, the 2300 postcode for Newcastle, Newcastle East, Cooks Hill, Bar Beach, and The Hill topped the list for average superannuation at $317,597.
University of Newcastle Associate Professor of finance Mia Pham said this was an example of income inequality.
"The 2300 covers inner-city Newcastle, and we can see that this area has a diverse mix of professionals, and we also have students, renters, and retirees," she said.
"So the fact that it ranks high in average superannuation, but low in median tells us there's a wide gap between the top and the bottom.
"It could be that a few individuals have very large super balances. For example, older professionals or those people that have a high income and it can skew the average upward."
The 2291 postcode was second-highest for average at $310,451, while Salamander Bay and Soldiers Point's postcode of 2317 was third highest at $248,851.
Low-socioeconomic areas like Windale were on the other end of the scale. The 2306 postcode had a median superannuation of $17,467 and an average of $51,658.
Associate Professor Pham said factors such as average income, employment and age played a role in an area's superannuation spread.
"Many residents may work in casual or part-time roles, which don't always come with consistent super contribution," she said.
"Areas with a younger population have less time to accumulate the super."
The 2308 postcode, made up entirely of the University of Newcastle campus, had a median super of $1220 and an average of $12,160.
Aboriginal and Torres Strait Islander residents also face systemic barriers to wealth building, Associate Professor Pham said.
"Another thing is the culture and social factor, because some people, let's say, the migrant population, they may have a lower balance because they just recently joined the workforce," she said.
The option to access superannuation during the pandemic was also more commonly used by people who were on lower incomes or in financial distress, creating a further divide, Associate Professor Pham said.
She said the impact of withdrawing super early may be larger than people expect.
"So let's say if a person withdraws about $20,000 at the age of 30, and if that money had stayed and earned a 7 per cent annual return, it could have rolled to over $150,000 by the age of 60, and by the age of 67, it's going to be more than $200,000," she said.
"So you can see that's a huge shortfall and it's entirely due to missing out on decades of compounding.
"I think early withdrawal was something people had to do, but it's going to be a really high price that they have to pay later in life and especially for those who already face the financial disadvantages."
The Association of Super Funds Australia recommends couples need $690,000 to comfortably retire on, while single people need $595,000.
That number assumes the person owns their home and receives some support from the age pension.
Associate Professor Pham said it also varied depending on different factors. For example, people in regional areas may need less than those in capital cities.
The estimate has increased from $500,000 for a single and about $580,000 for a couple 10 years ago.
Associate Professor Pham believed there should be more financial literacy to educate people about superannuation and address economic inequality.
"Many people do not understand how superannuation works," she said.
"They may not understand about the tax benefit of voluntary contributions or the compounding power of the investment.
"Sometimes they just consider super as set and forget. Studies show that many people don't know that the super fund they belong to performed very poorly, and they never change the fund."
The federal government has recently introduced initiatives to help bridge the gap, such as a tax on high-value accounts and a superannuation guarantee on parental leave.
Associate Professor Pham said those initiatives would make a difference, but that she would also like to see more regulation that encouraged employees to make voluntary contributions, particularly those on lower incomes.
Four Hunter postcodes have a median superannuation of more than $100,000, and a surprising area has topped the list, according to recent Australian Tax Office data.
The 2282 postcode topped the Hunter list with a median of $117,397, which encompasses Eleebana, Lakelands, and Warners Bay.
The superannuation data is for the 2022-23 financial year, which the ATO recently released as part of its taxation statistics.
The 2291 postcode of Merewether, Merewether Heights and The Junction was the second highest with $109,785, followed by 2305, which includes Kotara East, New Lambton, and New Lambton Heights, at $104,886.
Wangi Wangi rounded out the top four at $103,837.
Despite ranking at 23rd for median, the 2300 postcode for Newcastle, Newcastle East, Cooks Hill, Bar Beach, and The Hill topped the list for average superannuation at $317,597.
University of Newcastle Associate Professor of finance Mia Pham said this was an example of income inequality.
"The 2300 covers inner-city Newcastle, and we can see that this area has a diverse mix of professionals, and we also have students, renters, and retirees," she said.
"So the fact that it ranks high in average superannuation, but low in median tells us there's a wide gap between the top and the bottom.
"It could be that a few individuals have very large super balances. For example, older professionals or those people that have a high income and it can skew the average upward."
The 2291 postcode was second-highest for average at $310,451, while Salamander Bay and Soldiers Point's postcode of 2317 was third highest at $248,851.
Low-socioeconomic areas like Windale were on the other end of the scale. The 2306 postcode had a median superannuation of $17,467 and an average of $51,658.
Associate Professor Pham said factors such as average income, employment and age played a role in an area's superannuation spread.
"Many residents may work in casual or part-time roles, which don't always come with consistent super contribution," she said.
"Areas with a younger population have less time to accumulate the super."
The 2308 postcode, made up entirely of the University of Newcastle campus, had a median super of $1220 and an average of $12,160.
Aboriginal and Torres Strait Islander residents also face systemic barriers to wealth building, Associate Professor Pham said.
"Another thing is the culture and social factor, because some people, let's say, the migrant population, they may have a lower balance because they just recently joined the workforce," she said.
The option to access superannuation during the pandemic was also more commonly used by people who were on lower incomes or in financial distress, creating a further divide, Associate Professor Pham said.
She said the impact of withdrawing super early may be larger than people expect.
"So let's say if a person withdraws about $20,000 at the age of 30, and if that money had stayed and earned a 7 per cent annual return, it could have rolled to over $150,000 by the age of 60, and by the age of 67, it's going to be more than $200,000," she said.
"So you can see that's a huge shortfall and it's entirely due to missing out on decades of compounding.
"I think early withdrawal was something people had to do, but it's going to be a really high price that they have to pay later in life and especially for those who already face the financial disadvantages."
The Association of Super Funds Australia recommends couples need $690,000 to comfortably retire on, while single people need $595,000.
That number assumes the person owns their home and receives some support from the age pension.
Associate Professor Pham said it also varied depending on different factors. For example, people in regional areas may need less than those in capital cities.
The estimate has increased from $500,000 for a single and about $580,000 for a couple 10 years ago.
Associate Professor Pham believed there should be more financial literacy to educate people about superannuation and address economic inequality.
"Many people do not understand how superannuation works," she said.
"They may not understand about the tax benefit of voluntary contributions or the compounding power of the investment.
"Sometimes they just consider super as set and forget. Studies show that many people don't know that the super fund they belong to performed very poorly, and they never change the fund."
The federal government has recently introduced initiatives to help bridge the gap, such as a tax on high-value accounts and a superannuation guarantee on parental leave.
Associate Professor Pham said those initiatives would make a difference, but that she would also like to see more regulation that encouraged employees to make voluntary contributions, particularly those on lower incomes.