Average superannuation balance at age 49 versus what you really need

Your late-40s are the sweet spot between where superannuation balances are large enough to gather some good momentum, but at a time when there are still enough years left before retirement to fix any mistakes.

After all, by the time you reach your late-40s, many Aussies are at or nearing the peak of their earnings potential. By this age, most people have enough experience, seniority and pay rises under their belt to bring in a higher wage. And the higher the wage, the bigger your superannuation balance can be.

Here’s a breakdown of the average superannuation balance of Aussies aged 40, and the balance you need by retirement.

What is the average superannuation balance at age 49?

According to Rest Super, the average superannuation balance for Australian men aged 45-49 is $193,501 and for women it is $147,146.

Although at the age of 49, you could probably assume that the average superannuation balance is closer to the age 50-54 bracket above. For men aged 50-54, the average super balance is $254,071, and for women it’s $190,175.

The problem is, while learning about the average superannuation balance at age 49 is interesting, it doesn’t paint the picture of exactly how much you should have at this age to get the retirement of your dreams.

So how much superannuation should I really have at age 49?

According to the latest ASFA Retirement Standard, the benchmark for a comfortable retirement, is just over $54,000 per year for a single person and $76,000 per year for a couple.

To support that level of spending, ASFA estimates you’ll need a super balance of roughly $595,000 as a single and $690,000 as a couple by the age of 67.

The figures also assume that you own your own home outright and assume you’re receiving the age pension.

In order to reach that number, ASFA calculates that at the age of 49, Aussies should have a superannuation balance of around $297,500.

Worrying, that is significantly below the average superannuation balance for men and women aged 45-49. It’s also far below the average balance for both men and women aged 50-54.

It means the average Aussie is already behind on their superannuation. 

The problem…

The problem is that compulsory employer superannuation contributions aren’t enough. Many Aussies think that because their superannuation is invested in a diversified portfolio, which is often benchmarked to broad market indices like the S&P/ASX 200 Index (ASX: XJO), it’ll look after itself.

But the reality is that, while the Super Guarantee helps Aussies build savings for retirement, it will never be able to fund the lifestyle that they want. This is especially the case while the cost of living continues to accelerate.

In fact, leaving your superannuation on autopilot is one of the biggest superannuation mistakes that many Aussies in their 40s are making.

By leaving your superannuation on autopilot, what might be a $5 loss today could easily snowball into $100,000 by retirement after you take compound growth into account.

The post Average superannuation balance at age 49 versus what you really need appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.