Latest news with #MaryDelahunty
SBS Australia
10 hours ago
- Business
- SBS Australia
How much super do Australians need to retire? It could be less than you think
ASFA CEO Mary Delahunty attributed the rise in retirement affordability to higher super contributions. Credit: Getty / Xavierarnau / s-c-s / AtlasStudio / Oleksandra Korobova Australians on a median wage will be able to retire in a good financial position, according to the peak body for the superannuation industry. The Association of Superannuation Funds of Australia (ASFA) projects a 30-year-old with a super balance of $30,000, earning the median wage of $75,000 until retiring at age 67, should accumulate $610,000 in super. This exceeds the figure ASFA says is needed for a "comfortable" retirement, which it estimates requires $595,000 in super for a single person living in their own home. A homeowner couple needs $690,000 in superannuation to reach the same level of financial security, It is the first time the body has predicted that someone on the median wage will reach that financial goal, since its reporting started in 2004. But experts say it may take even less in superannuation to have a secure retirement, especially if you own your own home. The ASFA retirement standard breaks down the cost of retirement, examining health insurance, basic living expenses, and other essential costs. According to estimates for the March 2025 quarter, a household with a 'comfortable lifestyle' — including a reasonable car, health insurance and an overseas trip — spends $73,875 per year for a couple who own their home and about $52,383 for a single homeowner. In contrast, those living a 'modest lifestyle', the estimated annual budget was approximately $15,000 lower for singles than for couples living in their own home, typically spending less on health insurance, cars, and taking fewer holidays, among other expenses. While for renters living a 'modest lifestyle', a couple was estimated to have spent $64,259 and a single person $46,663 annually. Someone on the age pension is estimated to spend $29,024 per year, and a couple $43,753, with both figures including supplements. ASFA CEO Mary Delahunty attributed the rise in retirement affordability to higher super contributions. From July, employers will be required to pay 12 per cent of their employees' wages in superannuation, an increase of 0.5 per cent. "With the 12 per cent super guarantee coming in, we can now say that the system foundations are cemented for young, working people to have a comfortable retirement. It's a moment all Australians should be proud of," Delahunty said. Joey Moloney, the deputy director of the housing and economic security program at the Grattan Institute, told SBS News the real cost of retirement could be even lower, as retirees typically spend less once they stop working. "When you look at people's spending habits from pre-retirement to post-retirement, what you see is that people spend less in retirement and increasingly so as retirement goes on," he said. "Pensioners benefit from a bunch of discounts on council rates, electricity, medicines and other benefits that add up to an implicit income of thousands of dollars a year." For people who have paid off their mortgage, they could have an extra 30 per cent of their income freed up rather than going into repayments, Moloney said. He said most people who own their own homes would have a secure retirement, but the situation is different for renters. "What the data shows is that renters in retirement are actually typically doing it tough. Poverty rates are pretty high, and levels of reported financial stress are pretty high."
Yahoo
29-05-2025
- Business
- Yahoo
Major superannuation change to give Aussie workers $600,000 boost in weeks
Compulsory superannuation payments will increase in the coming weeks, and the boost will help young Australians retire with nest eggs of more than $600,000. This is nearly triple what some people are retiring with today. The super guarantee rate will increase from 11.5 to 12 per cent from July 1. This is the final legislated increase to the rate that employers are legally required to pay into your superannuation. A 30-year-old with a super balance of $30,000 today who earns the median wage of $75,000 is expected to accumulate a super balance of $610,000 in today's dollars, new research from the Association of Superannuation Funds of Australia (ASFA) found. RELATED $3 million superannuation tax change sparks property warning as 'panic' selling begins $1,831 Centrelink payment change coming within weeks: 'You'll get more' Australia's most in-demand jobs revealed with $125,000 salaries up for grabs: 'Short supply' Compared to previous generations, today's workers will benefit from higher compulsory contributions rates for longer periods of time. The median super balance for 60- to 64-year-old men today is $205,000, while for women in the same age bracket it is $154,000. ASFA found there was strong support for superannuation from younger Australians, despite them being decades away from retirement. It found 77 per cent of the 18 to 34 age bracket believed the compulsory contribution rate should be at least 12 per cent, while 82 per cent agreed or strongly agreed that regular contributions made them feel more confident about their financial future. 'The strong level of satisfaction, trust and confidence younger people feel about their super is encouraging to see as superannuation is often not front-of-mind for younger people,' ASFA CEO Mary Delahunty said. 'This result demonstrates that younger Australians are engaged with superannuation and well aware of its positive contribution in shaping their financial security in retirement.' To achieve a comfortable retirement, ASFA calculated that a single person needs $595,000 in superannuation, while a couple needs $690,000. These figures assume the retiree draws down all their capital and receives a part Age Pension. Super Consumers Australia has calculated Aussies need less in superannuation to retire, with its targets finding a single person needs around $310,000 and a couple around $420,000. ASFA noted that the contribution rate of 12 per cent wouldn't, in itself, guarantee adequate retirement incomes for today's younger workers. Factors like time out of the workforce to have and raise children, along with working in jobs not covered by the compulsory system, like gig economy work, would impact a person's capacity to build up their savings. The super guarantee rate increase to 12 per cent is just one change kicking in from July 1. Superannuation accounts with balances of $3 million or more will see the existing tax rate increase from 15 to 30 per cent on earnings above this threshold, including unrealised capital gains. This change is due to come into effect from July 1 but hasn't yet been legislated. Superannuation will start being paid on Parental Leave Pay from the new financial year. This means parents getting the government support will get an extra 12 per cent of their payment as a contribution to their super fund. The transfer balance cap, which limits the amount of super that can be transferred into the retirement phase, will increase by $100,000 from $1.9 million to $2 million. There has been some misinformation about changes to preservation and withdrawal rules, but the ATO has assured people that this is in retrieving data Sign in to access your portfolio Error in retrieving data
Sydney Morning Herald
23-05-2025
- Business
- Sydney Morning Herald
The advice gap: why are we abandoning middle-class retirees?
Super funds are well-positioned Your super fund probably knows you're getting close to retirement. They've got tools, calculators, and people on staff who want to help (and they're ready to charge a fee for that help too, albeit a smaller one than most comprehensive advisers). But here's the catch: they're legally restricted from giving you personal financial advice unless they jump through costly and complex hoops, like acquiring or establishing a licensed advice business and running it separately on a fee-for-service basis, just like a traditional financial planning firm. This restriction exists because current legislation still draws a hard line between what super funds can tell their members and what qualifies as personal financial advice. Even though both super funds and financial advisers are trying to help people make smart decisions about retirement, the system treats them very differently. The result? Funds that already manage your money often can't offer the tailored advice you actually need. And this isn't just theory – it's happening right now to people across the country. Virginia wrote to me after this week's episode of the Prime Time podcast featuring Mary Delahunty on funds giving advice. She and her husband are 63 and 65, both working part-time as they try to answer that one big question: do we have enough to retire? Loading 'We are both reasonably financially literate but online calculators will only get you so far,' she wrote. 'This will be the last big financial decision we are likely to make.' Their super is with a major and award-winning fund – and while they tried to get personal financial advice, they couldn't get past the 'general advice' script. They were even discouraged from accessing the higher-level, fee-based advice. So, like so many others, they're doing what feels safest: just keep working. 'I think there is an onus on the funds to offer discounted, personal advice – maybe on two visits – to give retirees confidence heading into retirement,' she said. 'Funds have been taking our money for years. They should be there to help when we need it most.' Virginia's right. Compulsory super was designed to give Australians dignity and control in retirement but right now, many are being left in the dark at the very moment they need clarity the most. The advice sector is confusing Even when people do get advice, it's not always clear what they're getting or how it all works until after they pay for it. Every advice business has its own process, its own language, and its own ideal client. Some offer a full-service model: they build the strategy, manage your investments, and oversee it all over the long term using a platform or an SMSF and a selection of managed funds or separately managed account (SMA) style investments. Others (but not anywhere near as many) focus on building a retirement strategy and supporting you to keep your super with your current fund. These are often the advisers that super funds refer members to – and they don't bite the hand that feeds them. Super funds tailor their offerings differently too. Some cater to members with lower balances, focusing on age pension navigation, investing and careful drawdown strategies. Others provide support to more affluent customers with more complexity. For Australians with more complex finances – typically with $750,000 or more in household super, a home, and other assets – a full-service financial advice model can offer reasonable value. These clients benefit from a full package of advice, investment management, tax strategies, and structured planning, all under one roof. For people in that position, a good adviser can help protect and grow wealth, avoid costly mistakes, and provide real peace of mind. But that model doesn't suit everyone. If your super balance is more modest, you may not need or want the complexity and cost of full investment platforms and individually managed accounts. Many people don't realise until deep into the advice process that they're being shifted out of their low-fee super fund into a new adviser-managed investment setup with platform fees, investment fees, and ongoing advice charges stacked on top. And by the time they notice, they've often already paid thousands in upfront costs and are set on a path to annual management. That's where transparency needs to improve. It also needs to be incumbent on funds to tell someone when they need more complex advice than they can offer – before they spend the money. Financial advisers v super funds: the quiet competition The disconnect in advice and needs has created quiet tension in the system. Financial advisers and super funds are increasingly offering overlapping services, but neither side wants to say it out loud: they're becoming direct competitors. Most advisers aim to manage your money on their terms – on their platform, using their investment model. And many do it very well, particularly for clients with larger or more complex portfolios. Loading But super funds are managing trillions of dollars on their platforms too, and they're delivering strong returns at very low cost. In 2024, the median return for balanced super fund options was 11.5 per cent, with total fees typically ranging from 0.4 per cent to 1.02 per cent, depending on the fund, the balance, and the investment style. Adviser-linked platforms and managed funds delivered similar investment performance in 2024 – but often with additional layers of cost. Managed funds and SMAs averaged 11.78 per cent returns before fees. After investment fees – which averaged 1.28 per cent – net returns dropped to around 10.51 per cent. And that's not the end of it. Many users also pay platform fees, administration costs, and ongoing advice fees on top. That might still make sense if you're in a high tax bracket, need personalised structuring, or are gaining other meaningful upside from the advice, but for many ordinary Australians it quietly eats into the return they thought they were getting. Both outcomes are strong. Both approaches can work if they are both available. But people should have the right to choose – and they should be supported with clear, accessible education to understand the pros and cons of each. So what's the hold up? Your super fund already manages your retirement savings, so why can't it offer you the personal advice you actually need? Because we're still waiting on the government to pass the Delivering Better Financial Outcomes (DBFO) reforms they promised last year. These changes were meant to let super funds offer affordable, scaled advice and create a new category of adviser to answer the simpler retirement questions so many people are stuck on. The government said it would be done before the next election. Yet here we are. Until the legislation is passed, nothing changes. But when it finally does, super funds and advisers can both step up and help people understand their options and offer advice that actually suits their needs.
The Age
23-05-2025
- Business
- The Age
The advice gap: why are we abandoning middle-class retirees?
Super funds are well-positioned Your super fund probably knows you're getting close to retirement. They've got tools, calculators, and people on staff who want to help (and they're ready to charge a fee for that help too, albeit a smaller one than most comprehensive advisers). But here's the catch: they're legally restricted from giving you personal financial advice unless they jump through costly and complex hoops, like acquiring or establishing a licensed advice business and running it separately on a fee-for-service basis, just like a traditional financial planning firm. This restriction exists because current legislation still draws a hard line between what super funds can tell their members and what qualifies as personal financial advice. Even though both super funds and financial advisers are trying to help people make smart decisions about retirement, the system treats them very differently. The result? Funds that already manage your money often can't offer the tailored advice you actually need. And this isn't just theory – it's happening right now to people across the country. Virginia wrote to me after this week's episode of the Prime Time podcast featuring Mary Delahunty on funds giving advice. She and her husband are 63 and 65, both working part-time as they try to answer that one big question: do we have enough to retire? Loading 'We are both reasonably financially literate but online calculators will only get you so far,' she wrote. 'This will be the last big financial decision we are likely to make.' Their super is with a major and award-winning fund – and while they tried to get personal financial advice, they couldn't get past the 'general advice' script. They were even discouraged from accessing the higher-level, fee-based advice. So, like so many others, they're doing what feels safest: just keep working. 'I think there is an onus on the funds to offer discounted, personal advice – maybe on two visits – to give retirees confidence heading into retirement,' she said. 'Funds have been taking our money for years. They should be there to help when we need it most.' Virginia's right. Compulsory super was designed to give Australians dignity and control in retirement but right now, many are being left in the dark at the very moment they need clarity the most. The advice sector is confusing Even when people do get advice, it's not always clear what they're getting or how it all works until after they pay for it. Every advice business has its own process, its own language, and its own ideal client. Some offer a full-service model: they build the strategy, manage your investments, and oversee it all over the long term using a platform or an SMSF and a selection of managed funds or separately managed account (SMA) style investments. Others (but not anywhere near as many) focus on building a retirement strategy and supporting you to keep your super with your current fund. These are often the advisers that super funds refer members to – and they don't bite the hand that feeds them. Super funds tailor their offerings differently too. Some cater to members with lower balances, focusing on age pension navigation, investing and careful drawdown strategies. Others provide support to more affluent customers with more complexity. For Australians with more complex finances – typically with $750,000 or more in household super, a home, and other assets – a full-service financial advice model can offer reasonable value. These clients benefit from a full package of advice, investment management, tax strategies, and structured planning, all under one roof. For people in that position, a good adviser can help protect and grow wealth, avoid costly mistakes, and provide real peace of mind. But that model doesn't suit everyone. If your super balance is more modest, you may not need or want the complexity and cost of full investment platforms and individually managed accounts. Many people don't realise until deep into the advice process that they're being shifted out of their low-fee super fund into a new adviser-managed investment setup with platform fees, investment fees, and ongoing advice charges stacked on top. And by the time they notice, they've often already paid thousands in upfront costs and are set on a path to annual management. That's where transparency needs to improve. It also needs to be incumbent on funds to tell someone when they need more complex advice than they can offer – before they spend the money. Financial advisers v super funds: the quiet competition The disconnect in advice and needs has created quiet tension in the system. Financial advisers and super funds are increasingly offering overlapping services, but neither side wants to say it out loud: they're becoming direct competitors. Most advisers aim to manage your money on their terms – on their platform, using their investment model. And many do it very well, particularly for clients with larger or more complex portfolios. Loading But super funds are managing trillions of dollars on their platforms too, and they're delivering strong returns at very low cost. In 2024, the median return for balanced super fund options was 11.5 per cent, with total fees typically ranging from 0.4 per cent to 1.02 per cent, depending on the fund, the balance, and the investment style. Adviser-linked platforms and managed funds delivered similar investment performance in 2024 – but often with additional layers of cost. Managed funds and SMAs averaged 11.78 per cent returns before fees. After investment fees – which averaged 1.28 per cent – net returns dropped to around 10.51 per cent. And that's not the end of it. Many users also pay platform fees, administration costs, and ongoing advice fees on top. That might still make sense if you're in a high tax bracket, need personalised structuring, or are gaining other meaningful upside from the advice, but for many ordinary Australians it quietly eats into the return they thought they were getting. Both outcomes are strong. Both approaches can work if they are both available. But people should have the right to choose – and they should be supported with clear, accessible education to understand the pros and cons of each. So what's the hold up? Your super fund already manages your retirement savings, so why can't it offer you the personal advice you actually need? Because we're still waiting on the government to pass the Delivering Better Financial Outcomes (DBFO) reforms they promised last year. These changes were meant to let super funds offer affordable, scaled advice and create a new category of adviser to answer the simpler retirement questions so many people are stuck on. The government said it would be done before the next election. Yet here we are. Until the legislation is passed, nothing changes. But when it finally does, super funds and advisers can both step up and help people understand their options and offer advice that actually suits their needs.
Yahoo
12-03-2025
- Business
- Yahoo
Superannuation warning as new $73,000 retirement reality exposed
The amount of money Australians need to retire comfortably has increased slightly over the last 12 months, following a rough couple of years of high inflation. But new figures reveal pressures have finally started to ease. The Association of Superannuation Funds of Australia (ASFA) found couples aged 65 now need $73,077 per year combined to achieve a comfortable retirement, while singles need $51,805. This assumes the retiree owns their own home outright. The budgets for a modest retirement were basically unchanged at $47,470 for couples and $32,897 for singles. The super body said the new figures highlighted that Aussies likely needed to top up their superannuation with voluntary contributions to ensure they achieve the kind of retirement they need. RELATED Retirement offer for Australians from idyllic island with no tax offers: 'Enjoy' Surprise winner after Woolworths and Aldi comparison grocery shop: 'More expensive' 'Red flag' NAB banker noticed before blocking $440,000 payment: 'Didn't add up' The cost of a comfortable lifestyle rose by around 1.3 per cent over the last 12 months, which was just over half of the Consumer Price Index of 2.4 per cent over the same period. Retiree costs rose by 0.1 per cent in the December quarter, with falling electricity prices helping to keep costs low. Electricity prices fell 9.9 per cent in the quarter, largely driven by commonwealth energy rebates. ASFA CEO Mary Delahunty said there had been a "substantial easing in price for the goods and services' that retirees purchase.'However, the last couple of years of high inflation are still weighing on their ability to fund a comfortable retirement,' she said. Insurance costs rose 1.1 per cent, which was the weakest quarterly rise since June 2022, while food prices were up 3 per cent. Domestic holiday travel and accommodation rose by 5.7 per cent due to increased demand. The superannuation body calculated the superannuation lump sums needed for a comfortable retirement at age 67 were $690,000 for a couple and $595,000 for a single. It's worth noting that Super Consumers has put this amount lower at $420,000 for a couple and $310,000 for a single to maintain their living standards in retirement, combined with the age pension. Delahunty said recent strong investment returns were helping retirees and those planning for retirement to reach their desired retirement lifestyles, but warned topping up superannuation would be necessary. 'The most recent Retirement Standard budgets reinforce the fact that Australians need both compulsory superannuation and voluntary contributions which are preserved until retirement to have the sort of retirement they need and deserve,' Delahunty said. Balanced super funds showed a typical return of at least 10.5 per cent in 2024, with some funds recording nearly 12 per cent. SuperRatings found monthly returns turned negative in February, which marked the second negative monthly return for the financial year, as the risks of US President Donald Trump's tariffs loomed. Despite the Reserve Bank cutting interest rates in February, both Australian and international share markets, which are key drivers of super fund returns, declined over the month. 'The impact of tariffs on China and potential flow on effects to the Australian economy in particular influenced Australian share expectations, offsetting any potential benefit from the reduction in interest rates,' the group said. While markets are more turbulent, SuperRatings executive director Kirby Rappell said it was important for Aussies to remember that superannuation was about long-term outcomes.
