Middle Australia on track for 'comfortable retirement': ASFA

Thanks to a subtle shift in superannuation policy, a 30-year-old Australian earning the median wage is, for the first time, on the path to achieve a comfortable retirement, according to the Association of Superannuation Funds of Australia (ASFA).

ASFA projected that a 30-year-old earning the median wage of $75,000, with a $30,000 super balance, will accumulate $610,000 by age 67. Significantly, this surpasses the industry body's $595,000 benchmark for a comfortable retirement for single homeowners.

But this "major milestone," as ASFA chief executive Mary Delahunty described it, is the result of the upcoming increase to the Superannuation Guarantee (SG)

From July, the SG rate will rise from 11.5% to 12%, which, according to ASFA, is expected to bolster a median wage earner's super savings by an estimated $20,000 over their lifetime.

"With the super guarantee increase to 12%, we are seeing super fulfill its objective of providing a dignified retirement for ordinary Australians, with today's 30-year-olds reaping the rewards of decades of progress in our world-class super system," Delahunty said.

"... 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."

The Super Members Council (SMC) noted that about 10 million Australians will benefit from the increase in compulsory super contributions, with an extra $317 expected to land in the coffers of the average worker next financial year. Young people and low-income earners, however, were singled out as "the biggest winners" from the change.

More than half of those benefiting are under 40, with people in their 30s comprising the largest share of beneficiaries.

Meanwhile, almost a third of those getting the increase earn less than $50,000 per year and around 70% of those getting the increase earn less than $100,000 a year.

"Our super system is the envy of the world because it lifts the retirement savings of everyday Australians, takes pressure off the taxpayer-funded pension, invests capital to grow Australian jobs and companies and - most importantly of all - gives millions of Australians a better life at retirement," SMC chief executive Misha Schubert said.