Gen X: This is the average super balance for your age

Now at your career peak, as a Gen Xer you need to plan your retirement carefully, explains Josh Alston.

How does your super stack up compared to other Gen Xers?

Figures from The Association of Superannuation Funds of Australia's (ASFA) October 2017 report 'Superannuation account balances by age and gender' show that many Gen Xers don't have enough super savings for an independent life once they stop working, and will need to rely on the government's age pension.

The maximum weekly age pension payment for those eligible (including the maximum pension supplement and the energy supplement) is $453.80 for a single and $684.10 for a couple.

Although Gen Xers may have been putting money into super for most or all of their working life, the compulsory employer super payments only recently increased to 9.5 per cent in 2014, after a slow start in the 1990s. This means many Gen Xers are behind where they need to be if they want a comfortable retirement.

For example, a 45-year-old should have $211,123 to be on track and a 49-year-old should have $260,676. But the average balance for a 45–49-year-old is actually $114,616.

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Generation X women are much further behind on their super

Women are in a particularly bad position, with Gen X women typically having substantially lower super balances than Gen X men. For example, the average balance for men aged 50 to 54 is $172,126 while for women in the same age bracket it's $99,520.

So why the disparity? The national gender pay gap in Australia, which currently sits at 14.6 per cent according to the Workplace Gender Equality Agency, is one of the main reasons: women have lower earnings, and therefore less goes into their super.

Women also tend to have more time out of the workforce caring for children and family than other household members, and are also more likely to be employed part time – all of which means they're earning less super than their full-time working male peers.

Time taken out of the workforce can particularly affect savings: even five years for a person on an average salary during their early 30s will reduce their retirement account balance by more than $80,000 in today's dollars, according to ASFA's Ross Clare.

Are you on track for a comfortable retirement?

ASFA defines a 'comfortable retirement' as having an income of $59,000 a year with a nominal return of 5.73% after fees and taxes. Click on the below infographic, How does your super compare (PDF) to see how you compare to your peers.

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So how are your retirement savings tracking?

According to ASFA's Retirement Standard, the super balances required for a comfortable retirement are:

• $545,000 for a single
• $640,000 for a couple

Importantly, these figures include outright home ownership and that you're in relatively good health. It is also assumed you will draw down all your capital, and receive a part age pension.

ASFA defines a comfortable retirement as one in which you can take domestic holidays and occasional overseas holidays, go to restaurants and enjoy a good range and quality of food, take part in a range of regular leisure activities, have top-level health insurance, own a car and replace your kitchen and bathroom over 20 years.

ASFA's Retirement Tracker can show you whether you're on track for a comfortable or a modest retirement.

How to get on top of your super

The good news is that as a Gen Xer, a concerted effort now – in what are likely the highest-paying years of your career – will help to boost your super balance at retirement and ensure you a healthy income stream. Even small changes over the next 15 to 30 years can make a big difference by the time you leave work and you can access your super.

Here are five ways you can catch up:

1. Work out how much super you'll have at retirement

There are several online calculators that can help you estimate your super balance on retirement, including MoneySmart's retirement planner. ANZ Smart Choice Super members can log in to ANZ Internet Banking and use the retirement calculator. Once you understand the gap between your projected balance and what you'll need to retire comfortably, you can put a plan in place.

2.  Make voluntary contributions

Any amount you contribute above your employer’s mandatory 9.5 per cent each year will benefit you in the long run – and you'll reap tax benefits (subject to contribution limits). Consider making a voluntary contribution each pay day, or salary-sacrificing part of your next pay rise or bonus.

3. Consolidate your super funds

If you have more than one super account, consolidating them will help you save on fees, benefit from the investment earnings of a larger pool of money, and make it easier to keep track of your balance.

4. Review the level of risk of your investment choice

Have you assessed the risk level of your super investment options? Many people opt for safer approaches such as 'balanced' or 'conservative' investment options, but depending on your appetite for risk and general market conditions, you could consider switching your investment strategy from 'balanced' to 'growth'. Speak to your financial adviser first to make sure you select the most appropriate investments for your circumstances.

5. Check your insurance levels

Make sure you have the right amount of cover to look after you or your family if you become unable to work, or in the event of your death.

Ready to make a contribution?

To make a concessional (before-tax) contribution, speak to your employer about salary-sacrifice.

For non-concessional (after-tax) contributions or personal contributions (on which you intend to claim a tax deduction - you must notify the fund), ANZ Smart Choice Super customers can make a contribution via BPAY.

Biller Code – 169060
Reference Code – member number (this is a combination of your ANZ Smart Choice Super BSB and account number.)