BREAKING NEWS: New analysis reveals that the average 30-year-old Australian earning the median wage is on track for a comfortable retirement for the first time. This significant milestone is attributed to the recent implementation of mandatory 12 percent superannuation contributions, which took effect on July 1, 2023.
According to the Association of Superannuation Funds of Australia (ASFA), this increase in the superannuation guarantee is a game changer for the nation’s retirement landscape. Mary Delahunty, ASFA’s chief executive, stated, “This is a major milestone in Australia’s retirement system. With the super guarantee increase to 12 percent, we are seeing super fulfil its objective of providing a dignified retirement for ordinary Australians.”
The increase means that employers will now contribute 12 percent of an employee’s earnings into their super, leading to an additional $20,000 by retirement for today’s 30-year-olds, who must earn at least the median wage of $75,000 annually to benefit from this change. The average Australian wage stands at $102,741.
As defined by ASFA, a comfortable retirement includes provisions for health insurance, a decent car, phone and internet services, leisure activities, and both domestic and international holidays. The total amount needed for such a lifestyle is approximately $595,000 for single homeowners and $690,000 for couples owning a home. Renters will require an extra 30 percent to cover similar expenses.
The news is particularly promising for women, who have historically faced greater disparities in retirement savings. A recent projection by super fund HESTA indicates that a woman starting her career in 2025 could accumulate $712,000 in superannuation by retirement—an increase of $411,000 compared to the average woman retiring this year. Currently, men in their early 60s have an average super balance of $395,000, while women have $313,360.
Delahunty emphasized, “With the 12 percent super guarantee coming in, we can now say that the system foundations are cemented for young, working people to have a comfortable retirement. It’s a moment all Australians should be proud of.”
This positive shift in Australia’s retirement savings framework marks a pivotal moment for younger generations, offering them a more secure financial future. As the country celebrates this achievement, attention will now turn to ensuring compliance across various industries, particularly in sectors known for unpaid superannuation contributions.
Stay tuned for further updates as this story develops, and reflect on how this milestone could impact your retirement planning today.
