Boosting superannuation balances key to Australians’ retirement aspirations

Australians are seeing better retirement outcomes as a result of superannuation guarantee contributions, says the Association of Superannuation Funds of Australia (ASFA) in a report released today.

Drawing on a variety of data sources, the report shows that superannuation balances have been growing across all ages, genders and income levels leading to improved quality of life in retirement.

“Superannuation is increasingly delivering better retirements for Australians from all walks of life,” said chief executive Dr Martin Fahy.

“It is pleasing to see that the strongest growth occurred for those with lower balance accounts, and for women.”

The report notes that many people retiring in the next few years will rely partially or substantially on the Age Pension for their retirement income as they have inadequate super savings, but the proportion of new retirees who are fully self-funded has been increasing.

“Hard working Australians aspire to self-sufficiency in retirement and want more than what the Age Pension can provide. They want to be able to have financial security in their old age to cover medical costs, aged care and general expenses.”

A recently conducted survey has shown that 80 per cent of Australians want to achieve ASFA’s Comfortable Retirement Standard[1], or higher.

Despite the promising growth of account balances, many Australians still face a retirement savings shortfall.

“The bipartisan, legislated policy of increasing the Superannuation Guarantee (SG) to 12% is by far and away the most critical step to ensuring an adequate retirement for all Australians.”

ASFA has also calculated average account balance data across all Australian states, territories and electoral regions.

The ACT ($186,743), Victoria ($142,412) and NSW ($133,643) have average balances above the national average of $132,646.

Balances are lower in South Australia ($131,914), Tasmania ($126,348), Queensland ($123,636), Western Australia ($119,980) and the Northern Territory ($95,170).

“Levels of retirement savings vary widely across the country. Increasing the SG will provide the biggest boost for people in regions with lower balances, who most need the additional savings.”

The data shows major discrepancies within state boundaries and even across suburbs within electorates.

For example, Kooyong ($312,746), Higgins ($279,307) and Goldstein ($277,511) had the highest average balances amongst Victorian electorates.

However other electorates including La Trobe ($128,771), Monash ($122,829) and McEwen ($113,322) had much lower average balances.

“For a person in McEwen, increasing the SG to 12% will boost their superannuation balance at retirement by $91,580 and deliver them a much better standard of living in retirement.”

“Superannuation is a national policy issue that needs to deliver for all Australians, not just those in wealthier regions,” concluded Dr Fahy.

[1] According to the ASFA Retirement Standard March quarter 2019, couples aged around 65, need to spend $61,061 per year to achieve a comfortable retirement, whereas singles need to spend $43,255.

For further information and media inquiries, please contact:
Katrina Horrobin, 0451 949 300.

About ASFA
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.