Superannuation check up: Here’s how much you should have saved by age 40, 50 and 60

All Australians strive for enough money in their superannuation to achieve the ultimate goal of a comfortable retirement.

That’s one where retirees are able to maintain a good standard of living. It includes top level private health insurance, ownership of a reasonable car brand, regular leisure activities, funds for home repairs and renovations, occasional meals out, and an annual domestic trip.

Of course, the alternative is a modest retirement, where retirees can cover expenses slightly above what the full Centrelink Age Pension would provide. Think basic health insurance with limited cap payments, a cheaper model of car, infrequent exercise, a limited budget for home repairs, minimal utility expenses, limited dining out, and maybe an annual domestic trip.

The question is, how do you know if you’re on track?

Here’s a breakdown of how much superannuation Aussies have saved by age 40, 50 and 60. And then how much you actually need. Because the numbers aren’t the same.

What is the average superannuation balance at age 40?

According to Rest Super, the average superannuation balance for a 40 to 44 year old male is $140,680 and for a female it’s $109,209.

What is the average superannuation balance at age 50?

The data shows that the average superannuation balance for a 50 to 54 year old male is $254.071, and for a female it’s $190,175.

What is the average superannuation balance at age 60?

For the 60 to 64 year olds, the average superannuation balance is $395,852 for men and $313,360 for women.

Great, but how does it compare to how much I actually need?

According to ASFA, a comfortable retirement is expected to cost approximately $54,240 per year for individuals and $76,505 per year for couples.

That equates to a superannuation balance of approximately $690,000 and for a single person this is approximately $595,000.

ASFA has crunched the numbers and it turns out that in order to reach that figure, you’d need a balance of $178,000 at age 40.

By age 50 you’d need to have $313,500 in your superannuation.

And then by age 60 your superannuation balance would need to increase to $496,500.

My superannuation balance is really far behind. How can I catch up?

The easiest way to boost your super balance is to add as much to it as you can. Individuals can salary sacrifice at a reduced tax rate of 15%.

Or you can also add after-tax money to your super, and then claim a tax deduction at tax time. You can make these contributions up to age 67 without extra work testing or exemptions. 

If you don’t have the funds available to add more cash into your balance, the next best thing you can do is ensure the money that’s already in there is working as best as possible. After all, if a fund even slightly underperforms a benchmark, such as the S&P/ASX 200 Index (ASX: XJO), over a long period of time it can seriously dent your end balance.

The post Superannuation check up: Here’s how much you should have saved by age 40, 50 and 60 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.