A recent survey has found that Australians may need twice as much of what they have in their superannuation accounts to fund their retirement.
The financial comparison website Finder surveyed 1,063 adults to find out the current situation among working Australians.
One finding was the average amount of savings the respondents said they needed for their retirement was $641,223 (US$433,700).
The figure was much higher than the super balance of an average working Australian about to retire.
This means most Australians will likely run out of money halfway through retirement.
With a super balance of $641,223, an average retiree would have an income of $33,749 per year, based on the retirement age of 64 and the average life expectancy of 83 in Australia.
However, the above amount is far from enough for retirees to afford a comfortable life after they stop working.
For a comfortable lifestyle, the budget needs to increase to $50,981 a year for singles, and $71,723 for couples.
Expert Says Workers Should Contribute More to Their Retirement
According to Graham Cooke, the head of consumer research at Finder, an Australian earning $80,000 a year could accumulate approximately $630,000 with the 11 percent super guarantee rate if they started working at age 20.However, he warned that people should not rely on the minimum contribution by employers as it might not be enough for a sufficient retirement.
“A significant number of Aussies are falling short of their desired retirement savings,” Mr. Cooke told The Epoch Times.
“There is a growing gap between what individuals anticipate their retirement nest egg will be and the actual amount they are able to accumulate.”
The financial expert encouraged Australians to make extra contributions to their super accounts whenever possible.
“Every extra contribution to your super is planting a seed that will grow through to retirement,” he said.
“Every extra contribution is an investment in your future self.
Contributing to Super As Early As Possible
Sarah Megginson, a personal finance expert at Finder, advised people to contribute extra funds to their super accounts as soon as they enter the workforce.“The younger you start making extra repayments, the better, and advancements in your career and pay rises all mean bigger contributions to your retirement fund, too,” she said.
“Thanks to compounding, even making an extra contribution of $50 a month from your 20s onwards can mean an extra six figures worth of wealth in your retirement fund.”
Meanwhile, Mr. Cooke said people also needed to check if their super fund could deliver the savings they wanted and shop around for better deals.
“With the rising cost of living, it’s critical to assess whether your superannuation fund is working in your best interest,” he said.
“Start by consolidating your super into one and choosing a fund that offers low fees and the right risk profile.”
