Big gap between rich and poor super savers: how you stack up
Super funds are battling financial market turmoil, but average balances climbed during the pandemic despite big withdrawals.
Australians’ average superannuation balances have climbed during the pandemic but there is a huge gap between the nation’s wealthiest super savers and the rest.
A new analysis by the Association of Superannuation Funds of Australia shows the inner-east Melbourne electorate of Kooyong has the highest average super balance of $321,593. That is more than twice the national average of $147,425 and almost five times higher than the electorate with the lowest average balance – western Sydney’s Blaxland at $66,610.
Among the states and territories, the biggest average super balances are in the ACT, at $205,369.
That’s followed by Victoria ($151,679), New South Wales ($149,063), South Australia ($147,148), Queensland ($142,345) Tasmania ($139,719) and Western Australia ($137,152).
Super savers in the Northern Territory have the lowest average balances of $107,677, and ASFA CEO Martin Fahy said this reflected its demographics of a younger population and proportionally fewer retirees.
“The biggest impact on your superannuation balance is your age and your income,” Dr Fahy said.
“The older you are, the more superannuation you’ve accumulated, and the more you earn, the bigger your balance.
“The ACT is characterised by a high number of public servants who have a higher superannuation contribution rate and a slightly older retiree population.”’
SA’s super balances eclipse larger states Queensland and WA because of its demographics. “Twenty-seven per cent of the population in South Australia are over 65, compared with 24 per cent across the country,” Dr Fahy said.
ASFA’s figures show average super balances have grown 11 per cent in three years, up from $132,646 in June 2019.
During the pandemic the Coalition government allowed 3.5 million people to withdraw up to $20,000 each from their super through its Covid-19 early release scheme, and MBA Financial Strategists director Darren James said this had a big impact on many people’s balances.
“A lot of people who accessed the scheme were those with lower balances,” Mr James said.
He said super remained the best vehicle for retirement saving because of its lower taxes, and he urged people to consider balance-boosting incentives such as the co-contribution scheme, salary sacrifice and spouse contributions.
“It’s becoming a bigger asset for a lot of people.”
Mr James said there were free online calculators that could help people project how their super would grow. “It gives you an idea of what your super can do for you, rather than having this mystical figure,” he said.
Dr Fahy said ASFA’s SuperGuru retirement tracker tool allowed people to enter their age, income and balance to work out what sort of retirement they could afford.
It also has a Super Balance Detective tool that allows people to punch in their year of birth to check if their super is on track to deliver a comfortable retirement. For example, someone born in 1970 requires $285,000 today, a 1980 baby needs $164,000, and a person born in 1990 should have $68,000.
“If your balance is lower, don’t panic,” Dr Fahy said.
“If you’re a younger person you’ve got an opportunity to start early and consolidate your super. And we still have a generous age pension system here that protects the most vulnerable people.”
More Coverage
Why having more than one super fund can be good for you
Superannuation fund members have long been urged to combine their accounts to save money, but sometimes it pays to double up.
The best ETFs of the past five years
Exchange traded funds, which let investors buy into entire sectors or markets with just one transaction, are going from strength to strength. But some ETFs are stronger than others.