‘Good news': Australians tipped to be $125k better off in retirement
The average young Australian is tipped to be $125,000 better off in their retirement simply by staying in the workforce, a major superannuation fund reveals.
Australian Retirement Trust says the rise in the superannuation guarantee over the last five years is 'good news' for Australian workers who will have more in their retirement nest egg.
Under changes to the superannuation guarantee proposed by the Rudd government and enacted by the Morrison government, every working Aussies superannuation rate automatically went from 9.5 to 12.00 per cent.
The changes were brought in incrementally, up 0.5 per cent a year, with the final change starting from July 1 2025.
According to the Australian Retirement Trust this five year plan will now see a 30-year old earning $100,000 retire with an additional $125,000 when they finish up their careers.
Australian retirement trust executive general manager for advocacy and impact, Anne Fuchs, said the boost to the SG rate is good news for all working Australians.
'This half per cent step may seem small, but for working Australians, it's like reaching the summit of your own financial Everest,' Mrs Fuchs said.
'Since the Superannuation Guarantee was introduced in 1992, it has become the cornerstone of Australia's retirement system – evolving from a modest 3 per cent contribution to a robust framework that provides you with meaningful savings for your future.'
Separate research from the Association of Superannuation Funds said the increase from to 12 per cent will mean the median 30-year old worker making $75,000 a year will add about $20,000 to their superannuation balance by the time they retire.
This $20,000 increase will mean the median 30-year old will retire with $610,000 in superannuation, above the $53,383 a year or $595,000 they would need for a comfortable retirement.
Couples should fare even better.
ASFA says a couple requires $73,875 a year or $690,000 combined in total to live comfortably in retirement using their super plus age pension top-ups.
The major caveat to these figures for singles and couples is owning your own home by retirement.
Check your superannuation rate
While the rate of change might seem small, Australian Retirement Trust urges Aussies to check their superannuation rate.
According to survey data by the super fund four out of every five Australians don't know how much they've put away for retirement, while only one in five can correctly identify the current superannuation guarantee.
'Whether you're just starting your career or nearing retirement, understanding these changes can help you make smarter financial decisions,' Ms Fuchs said.
'As we look towards our own retirement savings, we should also look towards ensuring the Superannuation Guarantee is fit-for-purpose as our nation ages and grows.
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