The average super balance for a male aged between 40-44 years old is $99,959, and for a female $61,9222. The average long-term annual compound median return on a ‘balanced’ super fund account is 7.5% a year for the 26-year period to 30 June 20183.
With the average salary being $82,4822b that means the average person is putting aside just $7,835 per year (the 9.5% Super contribution) toward their retirement.
Depending on how long you have to go until you retire and the investment returns achieved in that time, Super alone may not be enough to fund you for another 20 years in retirement.
The table below demonstrates that with a starting balance of $100,000, a higher than average salary of $100,000 per year and compounding annual returns of 7% – in 15 years, you would have around $513,000 in Super to retire on. If you wanted to retire at 60 and $60,000 per year income, your super would last about 8.5 years getting you to just age 68!
Realistically if you wanted to live off $60,000 a year, and you lived till 80 years old, you would need to have accumulated over $1.2 million dollars of income producing assets and that’s excluding inflation, interest and fees.
Try it yourself. Take your current income and multiply it by the number of years you’ll be in retirement and that will give you a good guide as to the level of incoming producing assets you need to acquire between now and then.