Average Australian Wealth at Retirement: How Do You Compare?

Average Australian Wealth at Retirement

We live in the Lucky Country and don’t really have too much to complain about.

And, presumably thanks largely to a fairly robust retirement savings plan known as superannuation, we have some of the wealthiest people around the world, as concluded by a recent report.

So what is the wealth of an average Australian at retirement?

Average Australian Wealth at Retirement

The average wealth of an Australian at retirement ranges between $275,000 and $450,000 per person.

A more precise average retirement figure proves difficult to conclude for two main reasons.

Firstly, there are varying definitions of retirement. Is it once someone retires from work? Reaches age 60 or 65? Or when they are eligible for Age Pension payments?

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What about when someone stops working full-time, but continues to work casually? Are they retired?

Without accurately being able to determine the term retirement, it becomes difficult to calculate the average wealth of an Australian at retirement.

Secondly, the only records available for wealth of specific age groups in Australia relates to average superannuation balances by age, which doesn’t include any personal investments or investments owned via other entities, such as companies and trusts.

Therefore, the figures above relating to the average wealth of Australians at retirement is based on a female’s average super balance of $275,000 at age 60 and $360,000 at age 65, and a male’s super balance of $360,000 at 60 and $430,000 at age 65.

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What is Considered a Wealthy Retirement in Australia?

Back in the day, yet not too long ago, having $1 million at retirement was considered to be a wealthy retirement. These days, having $1 million is not overly uncommon.

Given that retirement ages, relationship situations and homeownership status will affect how much a person needs to retire, defining a lump sum amount as a wealthy retirement (or not) is moot.

For instance, a renting couple retiring with $1.5M at age 55 does not necessarily provide a wealthy retirement; whereas a single debt-free homeowner retiring with $1.5M at 67 would live quite a wealthy retirement.

The latter would achieve a higher retirement income (and therefore afford more leisure activities) due to having fewer retirement years to fund, not having two mouths to feed and having no housing costs.

Same capital amount, but completely different circumstances and retirement outcomes.

With that being said, what is a wealthy retirement?

Well, according to ASFA, a comfortable retirement for a couple is around $72,000 per year and $51,000 for a single person. Given this, I would consider achieving a retirement income of, say, 30% over these amounts to be a wealthy retirement.

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What is a Good Amount to Retire On?

A good amount to retire on is whatever super balance you need that allows you to retire at your preferred age and cover all of the expenses associated with your desired retirement lifestyle. This is all part of the retirement planning process.

We all have different situations, with varying needs and wants. It’s important to calculate how much you need for your specific objectives, rather than worry about what everyone else targets. We find that most people can live their ideal retirement sooner than they think.

Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead-up to retirement. If you’re interested in learning more about our service and cost, click here.

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Thanks for stopping by - Chris