The average superannuation balance for Australians has surpassed $183,000 for the first time in history, as the $4.5 trillion retirement system erupts as a major battle ground for the next election.
A new report released by the Association of Superannuation Funds of Australia (ASFA) revealed the mean super balance for those aged 15 and over has now reached $202,644 for men and $164,206 for women. That’s up by more than $10,000 over the last year.
For the more than one million Aussies nearing the typical retirement age between the 60 and 64 age bracket, the average balance is $413,700 for men and $327,440 for women.
It comes after Treasurer Jim Chalmers declared the next election would be a “referendum on superannuation”, after One Nation leader Pauline Hanson labelled the current system “broken” and called for workers to be able to access their retirement funds early to help with housing or other cost-of-living pressures.
Liberal frontbencher and long-time critic of the system, Andrew Bragg, has called for the abolition of compulsory super and claimed the system hasn’t helped the budget and “not really helped many people get off the pension”.
ASFA CEO Mary Delahunty has hit back at the claims, telling news.com.au the data says otherwise.
“Age Pension reliance among over-65s has dropped from 70 per cent in 2012 to 56 per cent today,” Ms Delahunty said.
“Bear in mind that nobody retiring today has had a full career at compulsory 12 per cent super, so the biggest gains from this system are still ahead of us.”
Independent projections used in Treasury’s Retirement Income Review Final Report indicate the proportion of people over 67 receiving the full or part age pension will drop to around 50 per cent by 2059.
The biggest fall will be in the number of people getting the full pension.
Early access to super
Ms Delahunty said early access to super “hurt” people twice. Aussies could be hit with a significant tax bill when they withdraw the cash, she argued, and hit again when they retire with less.
“Then you’re left more dependent on Centrelink, and tomorrow’s taxpayers foot the bill,” she said.
“The super system is working for retirees and the federal budget. Its success is because that money stays locked away for retirement.
“Super isn’t a pot of money to be used to fix other problems like housing affordability and cost of living. Those issues need their own policy solutions, not the unfair and uncreative option of tapping into people’s retirement savings.”
A recent Finder survey of 1,011 Aussies found that 24 per cent had withdrawn money from their super before retirement. Medical expenses were the most common reason, along with people who withdraw their super during the pandemic.
Of those who did withdraw early, 57 per cent said they didn’t regret the decision while the remaining 43 per cent said they did.
There are currently limited circumstances under which you can access your super early, including on compassionate grounds, in cases of terminal illness or severe financial hardship.
Ms Delahunty said giving Aussies early access to super wouldn’t fix cost-of-living problems in the long term.
“It just pushes the problem into the future and asks everyday working Australians to give up their independence in retirement to solve a problem they didn’t create,” she said.
The Treasurer has argued expanding early access to super would “absolutely decimate the retirement income of millions of Australian workers”.
“One of the most important features of our superannuation system is … this idea that, with compounding interest over time, Australian workers can access the decent retirement incomes that they need and deserve after a lifetime of work,” he told Sunrise.
Average amount Australians have in superannuation
The ASFA data, released today, is based on tax data collected by the Australian Taxation Office for the 2023-24 financial year.
The data shows women now hold a greater share of total super assets than in the past, although gaps still persist at retirement age.
ASFA estimates that a single homeowner would need $630,000 in superannuation at age 67 to achieve a comfortable retirement, while couple homeowners would need a combined $730,000.
A 30-year-old is projected to need $70,500 now to be on track to achieve a comfortable retirement, a 40-year-old would need $178,000, a 50-year-old would need $313,500, and a 60-year-old would need $496,500.
The current maximum age pension for a single person is $1,200.90 a fortnight including supplements, or $600 a week.
In comparison, the relative poverty line for a single adult according to ACOSS and UNSW is $594 a week before housing costs.
ASFA puts the current cost of a comfortable retirement at $55,923 per year, or around $1,071 a week.
The age pension will be indexed on September 20, with maximum rates increasing by $36.80 to $1,237.70 a fortnight for singles.
The government will also lift the lower deeming rate from 1.25 per cent to 1.75 per cent, and the upper deeming rate from 3.25 per cent to 3.75 per cent.