Most Aussies missing the target for a comfortable retirement
New research by the Association of Superannuation Funds of Australia (ASFA) shows that most Australians are missing the target for a comfortable retirement.
Their new study shows that median super balances for retiring Aussies aged 60 to 64 are only $154,453 for men and $122,848 for women.
This is well below the $545,000 figure that ASFA estimates is needed for a comfortable retirement.
While retirement savings have grown significantly in recent years, ASFA chief executive Dr Martin Fahy said that it’s going to 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 to The New Daily.
Combined Pensioners and Superannuants Association chief executive Paul Versteegehas said that average retirement balances are “quite low” considering the system of superannuation has been in place for more than 25 years. However, he has reinforced that the 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.
“We need to let government and Australian citizens define what it means to have enough, and not leave it to ASFA or the superannuation funds.”
Eva Scheerlinck, chief executive of the Australian Institute of Superannuation Trustees has agreed, saying that the amount of savings needed will vary from person to person.
“All benchmarks have their limitations due to the various assumptions they make about lifestyle and expenditure patterns,” she told The New Daily.
“For example, the current benchmark for a ‘comfortable’ retirement of around $43,000 a year for a single person might be generous by some people’s living standards, but inadequate for the increasing cohort of single people who retire without owning a home.
“For this latter category, increasing the compulsory super contribution rate to 12 per cent will be critical.”