Simple change making Aussies $125k better off
The average young Australian is tipped to be $125,000 better off in their retirement simply by staying in the workforce, a major superannuation fund reveals.
Australian Retirement Trust says the rise in the superannuation guarantee over the last five years is 'good news' for Australian workers who will have more in their retirement nest egg.
Under changes to the superannuation guarantee proposed by the Rudd government and enacted by the Morrison government, every working Aussies superannuation rate automatically went from 9.5 to 12.00 per cent.
The changes were brought in incrementally, up 0.5 per cent a year, with the final change starting from July 1 2025. Australians tipped to be $125k better off when they retire. NewsWire / Nicholas Eagar Credit: NewsWire
According to the Australian Retirement Trust this five year plan will now see a 30-year old earning $100,000 retire with an additional $125,000 when they finish up their careers.
Australian retirement trust executive general manager for advocacy and impact, Anne Fuchs, said the boost to the SG rate is good news for all working Australians.
'This half per cent step may seem small, but for working Australians, it's like reaching the summit of your own financial Everest,' Mrs Fuchs said.
'Since the Superannuation Guarantee was introduced in 1992, it has become the cornerstone of Australia's retirement system – evolving from a modest 3 per cent contribution to a robust framework that provides you with meaningful savings for your future.'
Separate research from the Association of Superannuation Funds said the increase from to 12 per cent will mean the median 30-year old worker making $75,000 a year will add about $20,000 to their superannuation balance by the time they retire. The ASFA predicts the average 30-year old worker will now achieve a comfortable retirement. NewsWire / John Appleyard Credit: News Corp Australia
This $20,000 increase will mean the median 30-year old will retire with $610,000 in superannuation, above the $53,383 a year or $595,000 they would need for a comfortable retirement.
Couples should fare even better.
ASFA says a couple requires $73,875 a year or $690,000 combined in total to live comfortably in retirement using their super plus age pension top-ups.
The major caveat to these figures for singles and couples is owning your own home by retirement.
Check your superannuation rate
While the rate of change might seem small, Australian Retirement Trust urges Aussies to check their superannuation rate.
According to survey data by the super fund four out of every five Australians don't know how much they've put away for retirement, while only one in five can correctly identify the current superannuation guarantee.
'Whether you're just starting your career or nearing retirement, understanding these changes can help you make smarter financial decisions,' Ms Fuchs said.
'As we look towards our own retirement savings, we should also look towards ensuring the Superannuation Guarantee is fit-for-purpose as our nation ages and grows.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
West Australian
39 minutes ago
- West Australian
WA Budget 2025: Opposition calls for rethink on payroll tax as companies feel the pressure
Shadow treasurer Sandra Brewer has called on the Cook Government to reform payroll tax after it was left untouched in this week's State budget. Ms Brewer said the Government should look at either increasing the threshold to have to pay the tax or to lower the rate of the tax itself. Despite the call, she did not have a suggestion on how much to change either number by. Ms Brewer said the pleas from businesses had been falling on deaf ears. 'Industry associations and employer groups have been asking for a higher threshold and a lower rate to be more competitive with other Australian states for years now, but the government doesn't listen,' she said. 'The opposition is open to listening to all views on payroll tax but we encourage the government to use their parliamentary power and their record receipts of royalties and taxes to look at reforming this tax.' Currently, business with wages of more than $1 million pay payroll tax, with the rate increasing progressively through to business with wages of more than $7.5 million where the full rate of 5.5 per cent is applied. According to the Budget, the payroll tax raised $5.88 billion in the 2024-25 financial year and is tipped to rise to $6.15 billion in 2025-26. By 2028-29, the revenue raised by the tax is expected to surpass $7 billion. Surveying business Vision Surveys Consulting owner Jay Sidhu said he was feeling the pinch from payroll tax. 'Payroll tax is just an unnecessary burden to businesses, especially businesses like us in an economy like this where we're trying to hire more staff,' he said. 'It's being that hindrance for us to even look at potentially hiring more people, it's something that we have to consider very strongly before we actually think of growing sustainably.' Ms Brewer also linked the tax to the current housing shortfall, saying the tax disincentivized construction businesses from growing, limiting its capacity. 'I'm constantly approached by businesses who are finding the rising costs of doing business extremely difficult, and payroll tax is just another cost,' she said. 'It has to be passed on to clients or consumers and that contributes to everything going up. 'We see it particularly in small businesses that are working in the housing sector they have enormous costs and payroll tax is another burden that needs to be passed on to, ultimately, the home buyer.' A State Government spokesperson said taxes were being constantly monitored. 'Our Government continually monitors its tax settings, including payroll tax, to ensure our tax system is fair and competitive with other jurisdictions,' they said. 'It's important to note more than 90 per cent of WA's 235,000 businesses don't pay payroll tax — only larger businesses, and in recent years we've seen incredibly strong growth in business investment. 'Our government has delivered a range of tax reforms to support businesses and reduce red tape, including the biggest increase in the payroll tax threshold in more than two decades in 2020 when we increased the payroll tax exemption by $150,000. 'This provided a payroll tax cut to about 70 per cent of payroll tax paying businesses, including around 1000 that were no longer required to pay payroll tax.'
Herald Sun
an hour ago
- Herald Sun
Brisbane households who don't want green waste bin hit with $50 fee
Don't miss out on the headlines from Sustainability. Followed categories will be added to My News. Households in a major city are set to be slugged with an extra $50 waste levy as the council announces a major rollout as part of its annual budget to help skirt the state government's 'bin tax'. From August, Brisbane City Council will introduce the Universal Waste Charge, an opt-out green waste program for about 170,000 stand-alone households that will replace the Waste Utility Charge and scrap existing surcharges. Instead, residents will be charged a flat annual universal waste fee of $512.96 – whether they use the new green waste bin or not. This is an increase of about $50 per year, with the rollout expected to take place between August and December. Brisbane City Council will introduce an annual universal fee for green waste bins – even if you don't use it. Picture: NewsWire/Tertius Pickard Residents who already paid for a green waste bin will not have to cop the fee. However, those who do not want the bin will still have to pay the extra fee. 'Other households will pay an extra $49.52 a year, with $33 of this increase related to the waste levy introduced by the former Labor state government,' a council statement read. Brisbane Lord Mayor Adrian Schrinner said the annual fee would help the council dodge the state government's 'bin tax'. Picture: NewsWire / Glenn Campbell Brisbane Lord Mayor Adrian Schrinner said the change was part of a 'large-scale tax-avoidance scheme' that would help the council dodge the state government's 'bin tax'. He said the introduction of the green bins would help reduce strain on growing landfills. 'One of the things this does is it helps us avoid the state government's bin tax,' he said per The Brisbane Times. 'Every year there's a tax that increases on waste going to landfill. 'At the moment, for example, our green waste recycling program saves about $1.6m a year in state government taxes. 'We're running a large-scale tax avoidance scheme because I don't want anyone to have to pay the state government's bin tax.' The state government levy was introduced in 2019 and charges the council about $115 per tonne of waste in the landfill. It is expected to increase by $10 every year until 2028. Brisbane will roll out 170,000 bins to households in the coming months. Picture: Supplied The annual fee aims to reduce the amount of waste heading into landfills. Picture: Supplied Mr Schrinner argued the recently announced annual fee would help save between $2m and $3m within the first year of the scheme. In the span of five years, Brisbane City Council estimates it will save approximately $32m. 'Every house will get a green bin, and that will be part of the business-as-usual service,' he said per The Brisbane Times. 'The reason we're doing that is because of the state government's bin tax … that effectively forces ever-increasing costs onto councils.' Originally published as Brisbane households slugged with $50 green waste bin fee – even if they don't want one
Sky News AU
2 hours ago
- Sky News AU
About $125k nest egg bump for 30-year-old Aussie on average salary amid super hikes, Australian Retirement Trust shows
A 30-year-old Australian earning the average salary will be $125,000 better off by the time they retire under recent changes to superannuation launched over the past five years. This is the finding of Australian Retirement Trust (ART) which said the gradual increase of the mandatory superannuation contributions from 9.5 per cent in 2020 to 12 per cent from the start of July will contribute more than six figures into young Australians' super accounts. ART's executive general manager for advocacy and impact Anne Fuchs said a 30-year-old on $100,000 per year – the average salary in Australia – will reap massive benefits of the increases since 2020. "In a fortnightly pay statement, the increase in the superannuation guarantee rate may seem tiny,' Ms Fuchs said. 'But over a working lifetime, the magic of compound returns can turn those small increases into hundreds of thousands of dollars.' It comes as working Aussies will receive a 0.5 per cent super contribution bump from the start of the coming financial year. Mrs Fuchs likened the increase to 'reaching the summit of your own financial Everest' for many working Australians. 'Since the superannuation guarantee was introduced in 1992, it has become the cornerstone of Australia's retirement system – evolving from a modest three per cent contribution to a robust framework that provides you with meaningful savings for your future,' she said. 'An increase in superannuation contributions means you'll be adding that little bit extra to your super and over time, that really adds up.' The gradual super contribution changes from 9.5 per cent to 12 per cent was originally proposed under the Rudd government and enacted under former prime minister Scott Morrison. Other research from the Association of Superannuation Funds of Australia showed a 30-year-old worker earning $75,000 will be $20,000 better off due to the 0.5 per cent super change. The bump comes as Australia's $4.2 trillion super nest egg will grow from the fourth largest super pool in the world to the second over the coming decade. This is according to a report from the Super Members Council which showed Australia will surpass the United Kingdom's and Canada's pensions amid growth in Australia's superannuation guarantee scheme. Super Members Council CEO Misha Schubert lauded Australia's super system as the 'envy of the world'. 'Australia has the fastest growing super system globally – twice the rate of international peers,' Ms Schubert said. 'We're the only OECD country where spending on government-funded pension payments is falling and will continue to fall.'
