Superannuation increase: the towns with the biggest nest eggs

Australia’s biggest average superannuation balances aren’t the high wage-paying cities, but regional centres. See the list.

Big cities might pay the highest wages, but the places with Australia’s largest average superannuation balances sit outside the state capitals.

Ahead of compulsory employer super payments rising next week, the Association of Superannuation Funds of Australia (ASFA) examined average nest egg sizes across all age brackets in each state’s 10 largest towns and cities and found Albury in New South Wales took top spot.

Albury’s average super balance was $175,435, ASFA found, well above the national average of $147,425, Traralgon in Victoria ranked second at $169,360 and Victor Harbor in South Australia was third at $166,232. The Sunshine Coast had Queensland’s largest average super balance of $158,109.

ASFA deputy CEO Glenn McCrea said several regional areas with big nest eggs reflected “sea changes – people who are older Australians with higher balances”.

“The capitals have a much more diversified group of people living there,” he said.

Despite the regional strength, ASFA found super balances in some affluent capital city suburbs topped $500,000 in Sydney, Melbourne and Perth, and eclipsed $300,000 in Brisbane and Adelaide.

Among the states and territories, the ACT had the biggest average super balance of $205,369 – almost double the Northern Territory’s $107,677 and reflecting higher superannuation rates paid to public servants.

“It shows the benefit of getting extra super,” Mr McCrea said.

ASFA’s modelling of new Australian Taxation Office data also shows the July 1 rise in compulsory Superannuation Guarantee contributions, from 9.5 to 10 per cent, will enlarge Australians’ average nest eggs at retirement by $19,000.

Four more annual 0.5 per cent rises are legislated, from 2022 to 2025. ASFA says the five SG rises combined should add $85,000 to an average 30-year-old worker’s nest egg, lifting their final super balance from $449,000 to $534,000, – close to the $545,000 a single person needs for a comfortable retirement.

“Currently only 25 per cent of Australians achieve a self-funded retirement,” Mr McCrea said.

“By 2050, that number is set to double as a result of the super system moving to 12 per cent.

“For millions more Australians there is a little bit of a pot of gold at the end of the rainbow now … a lot of Australians don’t realise the benefit of compound interest.”

Social researcher Mark McCrindle said the social benefits of higher super balances at retirement were “huge”.

“They have options to travel more and be more mobile, and therefore stay younger for longer,” he said.

“They have money to see the kids or grandkids, go on family holidays together – their connection is very strong and is a catalyst for a lot of wellbeing.”

Mr McCrindle said affluent Australians had been moving to regional areas, attracted by good employment opportunities, the ability to work remotely while still earning “capital city salaries” and a lower cost of living that allowed them to build larger nest eggs.

“We are seeing that movement of wealth at the moment,” he said.