Australians are never too young to start planning for a comfortable retirement. Although we tend to think of superannuation and retirement planning as the domain of over-50s, the reality is that our superannuation funds require tending from the very moment we start contributing our hard-earned dollars to it.
The whole point of superannuation is to harness the power of compound interest over decades. If done correctly, this should mean that the fruit of our labours over our working lifetimes should enable most of us to enjoy at least a modest, and hopefully comfortable, retirement by the time we reach the final third of our lives.
Thanks to the vastly different ways Australians tend to spend their 20s and 30s, it can be difficult to know what kind of balance the average super fund might be at these ages. But thanks to a new research report from the Association of Superannuation Funds of Australia (ASFA), we can dive into exactly what those numbers look like.
So today, let's discuss the average superannuation balance for Australians at age 35.
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What is the average superannuation balance at age 35 in Australia?
The ASFA report found that, as of June 2022, the average super account balance for Australians aged between 35 and 39 was $90,822 for men and $71,686 for women.
Remember, an average metric is significantly affected by the most extreme numbers in its data sample. If one Australian aged 35 has an obscenely high balance of say $5 million, it will drag the average metric up significantly. As such, it is generally better to use the median metric, which is far less influenced by the outlying numbers in a data set, for these kinds of analyses.
With that in mind, the report found that the median superannuation balance for those aged between 35 and 39 in Australia was $70,181 for men and $54,391 for women.
For some context, the median balance for those aged between 30 and 24 was $39,796 for men and $34,327 for women.
By now, you might have taken note of the large gender disparity between both the average and median superannuation balances between men and women. Here's how ASFA explains this gap:
A number of factors are responsible for females having less superannuation than males on average. One reason is that females are more likely to have time out of the paid labour force following the birth of a child.
There also is considerable segmentation of the labour force, with women more likely to be employed in sectors where wages are lower on average. However, as the compulsory superannuation system matures the share of superannuation is increasing. Compulsory superannuation is beneficial for both men and women, particularly women.
The recent abolition of the $450 a month wages threshold for payment of compulsory superannuation will assist in increasing the share of employer contributions being paid into the accounts of females as around two-thirds of those affected by the threshold are female.
So there you have it, the average and median superannuation balances for those aged around 35 in Australia. With these numbers in mind, it might be a good time to check your own super balance, particularly if you are in this age bracket, and see how yours compares.
Earlier this month, my Fool colleague Zach reported that Australians should aim to have at least $59,000 in super by age 30 and $156,000 by age 40 if they wish to be on track for a comfortable retirement. It seems we collectively have a long way to go before we hit those numbers.
