Invest
The magic number: are you on track for retirement?
Despite myths that super is “not improving retirement outcomes”, the industry’s association has said the system is on track to set up generations of Aussies for a comfortable retirement.
The magic number: are you on track for retirement?
Despite myths that super is “not improving retirement outcomes”, the industry’s association has said the system is on track to set up generations of Aussies for a comfortable retirement.
Speaking today, the CEO of the Association of Superannuation Funds of Australia (ASFA), Dr Martin Fahy said super was working well to ensure the current workforce has a comfortable retirement.
He added, however: “A lift in the super guarantee (SG) to 12 per cent sooner rather than later would mean the great promise of compulsory super would be even more sure.”
Breaking it down by age, he said a 30-year-old on $70,000 a year who is paying a 9.5 per cent SG and lifting the SG to 12 per cent by 2025 is “well on track to reach the ASFA comfortable standard of living”, provided they retire at 67 and have $50,000 in their super.”
However, a 35-year-old on $100,000 with nothing in their super could still start putting money into super today and still have a comfortable retirement.
“At later stages there can be more catching up to do,” Dr Fahy added.
According to ASFA, a comfortable lifestyle in retirement allows a healthy retiree to enjoy a “broad range” of leisure activities while having a good standard of living that covers the price of household goods, private health insurance, good clothes, electronic equipment, occasional domestic and international travel and a decent car.
To achieve this, ASFA said singles will need $545,000 in super and couples will require $640,000, assuming retirees draw down all their capital while receiving a part age pension.
That means singles will need $43,694 a year and couples will need $60,063 to achieve a comfortable lifestyle. However, once retirees reach 85, the budget drops to $39,443 for singles and $55,382 for couples.
Continuing, Dr Fahy said a 40-year-old on a $70,000 salary will need “at least” $175,000 in their super currently, while a 50-year-old will need $275,000 and a 60-year-old will require $425,000.
However, a 40-year-old on a $100,000 salary will need $100,000 today to make the "comfortable standard" and a 50-year-old will need $250,000 in super today to "get comfortable by 67,” he said.
“A 60-year-old on that [$100,000] salary needs to stay on that salary for another seven years to be in comfort by retirement. They also need $410,000 in super today to be on track.”
Last week, Dr Fahy responded to a number of “common and erroneous misconceptions” about the super system, and argued that super is not going to “come up short” as a public policy.
He explained: “By 2050 we will have reduced the reliance on the full or part aged pension to less than 50 per cent.
“The age pension is only 2 to 3 per cent of GDP and will remain contained at that level, thanks to super.”
He also disputed the argument that saving outside of super will deliver better outcomes, calling the system the “best game in town” when it comes to retirement income.
“Concessional tax treatment of superannuation leads to more dollars of savings being invested and higher after-tax investment returns from all forms of investment compared to being directly held by individuals,” he concluded.
Spending
Qantas announces $2.3bn loss but plans to be flying again by Christmas
Australia’s national carrier has revealed the devastating impacts border closures have had on the company, while noting a possible return date to international operations in its full-year market upd...Read more
Spending
Will your frequent flyer status be impacted by COVID?
In the latest bid to kick-start the travel industry post-lockdowns, Australia’s largest airline has announced that it is rewarding its frequent flyers by extending their status. ...Read more
Spending
‘Technology, not taxes’: Why not both?
The government has joined the rest of the world in looking to offset carbon emissions, albeit through technology, not taxes, despite the possibility that positive taxes and incentives could potentiall...Read more
Spending
Social media spending balloons to $118bn
Australians are spending a whopping $118 billion on discretionary items through social media and apps, fresh figures have revealed. ...Read more
Spending
Why payphones are set to become free
Australians will now be able to make free calls from any Telstra payphone under a new initiative aimed at helping those who are in need, Telstra’s CEO has revealed. ...Read more
Spending
7 surprisingly simple ways to save money and help the environment
The rising costs of living is providing consumers with a rare win-win scenario by saving money and helping the environment. ...Read more
Spending
How much are you wasting on unused subscriptions?
Australians are continuing to pay for subscriptions they are not using, costing households up to $2,000 a year, new banking figures have revealed. ...Read more
Spending
Viagogo under the microscope for ‘ripping off’ consumers
Viagogo is under investigation by Fair Trading after ticket scalpers have been accused of raking in excessive profits through the ticketing site. ...Read more
Could property prices inflate by another 20%? What’s happening in recent dividend announcements? Did your fund fail the YFYS test?
Listen now
What does the NSW regional permit mean for property investors? Who really wins from the BHP-Woodside merger?
Listen now
The sea and tree-change norm; Square’s acquisition of Afterpay; Why you should think twice before turning to TikTok for advice
Listen now
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Spending
Qantas announces $2.3bn loss but plans to be flying again by Christmas
Australia’s national carrier has revealed the devastating impacts border closures have had on the company, while noting a possible return date to international operations in its full-year market upd...Read more
Spending
Will your frequent flyer status be impacted by COVID?
In the latest bid to kick-start the travel industry post-lockdowns, Australia’s largest airline has announced that it is rewarding its frequent flyers by extending their status. ...Read more
Spending
‘Technology, not taxes’: Why not both?
The government has joined the rest of the world in looking to offset carbon emissions, albeit through technology, not taxes, despite the possibility that positive taxes and incentives could potentiall...Read more
Spending
Social media spending balloons to $118bn
Australians are spending a whopping $118 billion on discretionary items through social media and apps, fresh figures have revealed. ...Read more
Spending
Why payphones are set to become free
Australians will now be able to make free calls from any Telstra payphone under a new initiative aimed at helping those who are in need, Telstra’s CEO has revealed. ...Read more
Spending
7 surprisingly simple ways to save money and help the environment
The rising costs of living is providing consumers with a rare win-win scenario by saving money and helping the environment. ...Read more
Spending
How much are you wasting on unused subscriptions?
Australians are continuing to pay for subscriptions they are not using, costing households up to $2,000 a year, new banking figures have revealed. ...Read more
Spending
Viagogo under the microscope for ‘ripping off’ consumers
Viagogo is under investigation by Fair Trading after ticket scalpers have been accused of raking in excessive profits through the ticketing site. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
