How Much Super Should I Have at 60?

Wondering if your superannuation balance is on track as you approach age 60? This question becomes increasingly important as retirement draws closer. Many Australians worry they haven’t saved enough, while others might be unsure if their current super balance will provide the retirement lifestyle they expect.

Understanding Superannuation Balances at Age 60

Before comparing your super balance to others, it’s helpful to understand what typical superannuation balances look like for Australians in your age group. This provides context for your own super account and can help identify if you might need to make additional contributions before retirement.

According to the Australian Taxation Office, the median super balance for Australians aged 60-64 was $177,981, while the average super balance was $341,585. The significant difference between median and average balances shows that some Australians have substantially higher superannuation balances, which pulls the average upward.

Gender Differences in Super Balances

There are notable differences in superannuation balances between men and women at age 60. The median super balance for men aged 60-64 was $205,385, while for women it was $153,685. This gender gap reflects factors such as career breaks, part-time work, and differences in annual income.

The Association of Superannuation Funds of Australia (ASFA) recommends a super balance of approximately $453,000 at age 60 for a comfortable lifestyle. However, this figure represents an ideal target rather than the reality for many Australians.

Factors That Influence Your Super Balance

Many factors impact your super balance by age 60, including your employment history, whether you worked full-time or part-time, your salary levels, employer contributions, super contributions above the SG rate, investment options, insurance cover, fees paid to your super fund, and any early withdrawals. If your super balance is lower than the average balances, it might be due to perfectly valid personal circumstances such as career breaks or working arrangements.

How Much Super Do You Need for a Comfortable Retirement?

Understanding how much superannuation you should have at 60 requires looking ahead to what you’ll need for retirement. The ASFA Retirement Standard provides guidance on this question.

According to ASFA, a single person needs approximately $595,000 in retirement savings to fund a comfortable retirement, while couples need around $690,000. These figures assume you own your own home outright, have no mortgage, and will become eligible for at least a part Age Pension.

What Does a “Comfortable Retirement” Include?

The ASFA Retirement Standard defines a comfortable lifestyle as one that allows you to pay for daily essentials, afford home improvements, dine out occasionally, participate in leisure activities, take occasional holidays, maintain private health insurance, and replace household items as needed. In today’s dollars, a comfortable retirement costs approximately $52,085 per year for singles and $73,337 for couples. This contrasts with a modest retirement, which costs about $33,134 for singles and $47,731 for couples annually.

The Role of the Age Pension

The figures above assume you’ll receive some Age Pension to supplement your retirement income. The Age Pension serves as a safety net for many Australians whose superannuation balances fall short of funding their entire retirement. If you retire at 60, you’ll need to be fully self-funded until you reach Age Pension eligibility at 67, which means having sufficient super savings or other retirement savings to cover those years.

Are You on Track With Your Super at 60?

Determining whether your super balance at 60 is adequate requires comparing it to your retirement goals and not just to average balances.

Tools to Check Your Super Progress

Several online tools can help assess if your super is on the right track. A retirement calculator can show what your super balance should be at your current age to achieve a comfortable retirement. These calculators typically consider your current age, gender, super balance, estimated retirement age, assumed investment earning rate, and regular contributions to provide projections.

Comparing Your Balance to Retirement Needs

According to the Super Guru calculator, at age 60 your super balance should be around $469,000 to be on track for a comfortable retirement. This aligns with the ASFA Retirement Standard, which suggests having approximately $595,000 by age 67 for a comfortable lifestyle. If your super balance at 60 is significantly below these figures and you’re concerned about how much super you’ll need, there are still strategies available to boost your super savings in the final years before retirement.

Boosting Your Super in the Final Years Before Retirement

If your super balance at 60 isn’t where you’d like it to be, you still have options to improve your financial situation before retirement.

Effective Strategies to Increase Your Super

Several approaches can help boost your superannuation funds in your final working years. Making catch-up contributions is one way to use any unused concessional contribution caps from previous years. Salary sacrifice arrangements allow you to contribute additional before tax salary to your super fund, which can also provide a tax deduction and increase your super balance. After tax contributions, also known as non concessional contributions, can further boost your super account, and may make you eligible for government co contributions if you meet income requirements.

Reviewing and consolidating your super accounts can help avoid multiple fees and ensure your super fund has your tax file number recorded. Checking your investment strategy and investment options is also important to ensure they align with your retirement goals and risk tolerance. Spouse contributions and voluntary contributions can also play a role in increasing your super savings.

Tax Considerations for Super at Age 60

A significant advantage of reaching age 60 is the tax treatment of your super. If you’re 60 years or older, your super payments may be tax-free, which creates opportunities for tax-effective retirement planning. For those still working at age 60, a transition to retirement strategy allows you to access some of your super while continuing to make super contributions and salary sacrifice contributions.

Conclusion

While average super balances at age 60 provide a useful benchmark, your required super balance depends on your personal circumstances, retirement lifestyle expectations, and whether you’ll receive the Age Pension. The ASFA Retirement Standard suggests singles need approximately $595,000 and couples need about $690,000 by retirement age for a comfortable lifestyle. If your super balance at 60 is below these targets, focusing on catch-up strategies, salary sacrifice, and additional contributions during your final working years can significantly improve your retirement savings.

Remember, superannuation funds are just one component of retirement planning. Other factors-including home ownership, additional retirement savings, expected retirement age, and potential part-time work-also influence how much super you’ll need. Consider using a retirement calculator and seeking advice from your super fund or a financial advisor to develop a plan tailored to your financial situation and retirement goals.