Less than half of Australian retiring with enough for comfortable life
September 9th, 2019
Less than a quarter of Australians are leaving the workforce with enough super to fund a comfortable lifestyle, a new report has found.
The Association of Superannuation Funds of Australia (ASFA) study found median super balances for retiring Australians aged 60 to 64 were only $154,453 for men and $122,848 for women.
Those are both well below the $545,000 figure that ASFA estimates is needed to fund a ‘comfortable’ lifestyle, in which retirees are able to afford holidays, a reasonable car, private health insurance, and other goods and services someone with more modest savings wouldn’t.
While retirement savings have grown significantly in recent years (with average balances rising 11.4 per cent for men and 15.4 per cent for women in the two years to 2016-17), ASFA chief executive Dr Martin Fahy said it will be several years before the median balance reaches the standard for a comfortable lifestyle.
“Once the legislated increase of the Superannuation Guarantee to 12 per cent is in place, ASFA projects around half of Australians will be living comfortably in retirement by 2050, which is just over double the current proportion,” Dr Fahy said.
ASFA standard not universally appropriate
Speaking to The New Daily, Combined Pensioners and Superannuants Association Chief Executive Paul Versteege said average retirement balances are “quite low” given the system has been in place for more than 25 years, but cautioned the $545,000 figure given by ASFA doesn’t suit everyone.
“For some people, that’s too much, for others it will be far too small,” Mr Versteege said.
For example, those retiring with the current median balance are unlikely to be unhappy through their retirement, Mr Versteege said, and focusing exclusively on retirement balances ignores the role that age pensions play in ensuring everyone has a dignified retirement.