The Association of Superannuation Funds of Australia (ASFA) released new data on the retirement savings needed at various ages to achieve a comfortable standard of living in retirement, alongside data on the superannuation balance for the average Australian man and woman at various ages.
The analysis indicates that while those on a wage of $90,000 a year will potentially achieve the level of savings required to support a retirement lifestyle at the ASFA Comfortable Retirement Standard level, this will require super guarantee (SG) contributions at the rate of 12 per cent of wages for around 35 continuous years.
For an individual on $65,000 a year, SG contributions at 12 per cent would be needed for around 45 years.
ASFA regularly publishes the amount needed at age 67 to support spending during retirement at the ASFA Comfortable Retirement Standard level.
The amount required according to ASFA is $595,000 for a single person and $690,000 for a couple. The estimate assumes access to a full or part age pension as the superannuation balance is drawn down. It is assumed that the account balance is exhausted at age 92.
For a person on a lower salary compulsory superannuation contributions are lower than for a person on a higher salary.
At age 40 a person on a $65,000 wage needs to have a balance of $162,000 if they are only going to have compulsory contributions up to age 67.
For a person on $95,000, the figure at age 40 is lower, around $113,000, as they will benefit from high compulsory contributions in dollar terms given the higher wage.
ASFA said women generally have lower super balances than men, with the gap starting to widen from age 30 onwards. Leading up to retirement age, the median super balance for women is around 25 per cent lower than for men.
