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News.com.au
5 days ago
- Business
- News.com.au
Super boost shunts millennials into comfortable retirement, super fund says
The average 30-year-old Australian earning the median wage is on track for a comfortable retirement for the first time, forecasters have revealed. The milestone comes from analysis by the Association of Superannuation Funds of Australia (ASFA), and was down to mandatory 12 per cent superannuation payments becoming a reality. 'This is a major milestone in Australia's retirement system,' ASFA chief executive Mary Delahunty said. 'With the super guarantee increase to 12 per cent, we are seeing super fulfil its objective of providing a dignified retirement for ordinary Australians, with today's 30-year-olds reaping the rewards of decades of progress in our world-class super system.' From July 1, workers' superannuation guarantee rate increased from 11.5 per cent to 12 per cent, meaning employers pay 12 per cent equivalent amount of your earnings into super. Unpaid super is a concern in many casualised industries. The bump to 12 per cent tips today's 30-year-olds into a comfortable retirement, the Association of Superannuation Funds of Australia modelling says. The increase means about an extra $20,000 come retirement time. The test-case 30-year-old needs to be on at least the median wage though, which is about $75,000. The average Australian wage is $102,741. '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,' Ms Delahunty said. 'It's a moment all Australians should be proud of.' A comfortable retirement means being able to pay for health insurance, a decent car, phone and internet, regular leisure activities, an annual domestic holiday and an international holiday every seven years. The amount needed to tick these boxes is $595,000 as a single homeowner and $690,000 combined for a homeowning couple. A retiring renter needs an extra 30 per cent. As well as being positive news for Australians only a decade or two into their working lives, the super guarantee increase to 12 per cent has also been heralded as a win for women. Modelling on the change, done by super fund HESTA, projects the increased payments will enhance the stark difference between younger women and women retiring now. Under HESTA's modelling, a woman starting her career in 2025 was now projected to have $712,000 of super when she retired; $411,000 more than the average female retiring this year. At the moment, the average Australian male aged in his early 60s has $395,000 in super, versus $313,360 for women.
Daily Mail
5 days ago
- Business
- Daily Mail
How much superannuation you should have right now based on your age - so are you ahead or behind?
Fresh analysis suggests many average-income Australians are already on track for a comfortable retirement - but experts are divided on how much is really enough. For the first time, the Association of Superannuation Funds of Australia (ASFA) projects that a 30-year-old earning the median wage of $75,000 is now on track to retire comfortably, thanks to July's increase in the superannuation guarantee to 12 per cent. According to ASFA's projections, a 30-year-old with a current super balance of $30,000 and a steady median income until retirement at age 67 would retire with about $610,000 in superannuation. That's more than the $595,000 the organisation says is needed for a single homeowner to retire comfortably. ASFA CEO Mary Delahunty called it a 'major milestone' in the evolution of Australia's retirement system. 'This is a major milestone in Australia's retirement system,' said ASFA CEO Mary Delahunty. 'With the super guarantee increase to 12 per cent, we are seeing super fulfill its objective of providing a dignified retirement for ordinary Australians, with today's 30-year-olds reaping the rewards of decades of progress in our world-class super system.' How much super you should have for your age according to the AFSA AGE 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 SUPER BALANCE $5,500 $11,000 $18,500 $26,000 $34,000 $41,500 $50,000 $59,000 $66,500 $74,000 $83,000 $93,000 $101,500 $111,500 $122,500 $133,000 $144,000 $156,000 $168,000 $179,000 $190,000 $201,000 $213,000 $226,000 $239,000 $252,000 $266,000 $281,000 $296,000 $311,000 $328,000 $344,000 $361,000 $377,000 $393,000 $415,000 $431,000 $453,000 $469,000 $490,000 $509,000 $531,000 $549,000 $571,000 $584,000 According to ASFA Australians need $690,000 in super savings for a couple, or $595,000 for a single person, by age 67 to enjoy a comfortable retirement. These estimates are based on the assumption that you own your home outright, receive a part Age Pension, and achieve an average annual investment return of 6 per cent. But many Australians are falling short of that target. For those aged 60 to 64, the average super balance is around $395,000 for men and $315,000 for women. The median balances are significantly lower - $220,000 for men and just $163,000 for women. The average can be skewed upward by a small number of people with very large super balances, while the median gives a better sense of what a typical person has. Bestselling finance author Scott Pape said Australians could retire comfortably with far less than ASFA's recommended amounts, which he argued were unrealistic for most people. 'If you own your own home, get the aged pension, and you're willing to do a bit of paid work, you could comfortably retire on as little as $250,000,' he said on his Barefoot Investor website. 'The people who calculate the ASFA figure are … the super fund lobby. It's a bit like asking old Dr Kellogg, 'What's the most important meal of the day?' (Breakfast, of course!)' Pape pointed to alternative estimates he believes are more practical, citing research by Super Consumers Australia and the Australian Bureau of Statistics. 'A group called Super Consumers Australia (a partner of CHOICE) has done the research and come up with their own figures. Not only are their figures much more attainable, they're based on ABS research on what Aussie retirees spend.' According to Super Consumers Australia, a single homeowner needs about $310,000 in super, while a couple needs around $420,000 at retirement to maintain their current lifestyle. 'Combined with income from the age pension, homeowners with this amount of super can reliably provide an annual amount of $43,000 and $62,000 until age 90,' the organisation said earlier this year.
SBS Australia
17-06-2025
- 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."
