You may have read quite a few articles, here and elsewhere, in recent years about how much super you should have in your account.
But if you’re tempted to move on without reading ‘yet another one’, it might be time to think again, because the goalposts keep moving and, in these post-pandemic, high cost-of-living times, they have moved significantly.
Australia’s annual inflation rate climbed to 7.3 per cent in the third quarter of this year and all indications are that it is probably now about the 8.0 per cent mark.
Petrol prices may have eased off slightly from a startling peak earlier this year, but the cost of groceries and other household items continues to climb.
Meanwhile, interest rates have gone up every month since May this year and most major banks are forecasting another hike when the Reserve Bank makes its December announcement tomorrow.
Read: Australians expect superannuation shortfall
For those who have retired, it means your super balance won’t buy you as much as it used to, at least for now. Those who have not yet retired might be facing an additional issue.
Although data from superannuation regulator APRA shows personal super contributions climbed 17 per cent in the year to September 30 to $36.6 billion, and total contribution rose 12 per cent to $150 billion, the current cost-of-living pressures may lead to some winding back their super contributions to cover the costs of ongoing price hikes.
For some, depending on individual circumstances, this may be the only viable option in the short term. Others may have income circumstances that allow more flexibility.
Read: Pay off the mortgage or top up your superannuation?
Either way, now is as good a time as any to revisit your super ‘dashboard’ and see if what you have stashed away will be enough to see you through life.
So, how much super should you have in your account right now? According to the Super Guru website, it depends very much on your age.
If you were born in 2000 or later, the Super Guru calculator says you should have a grand total of $0 in your super account. Oh, to be so young again!
For those of us who are just a bit older than that, it’s a different story. Unsurprisingly, the calculator works on a sliding scale with the amount required with age during your working life.
If you are 50 years old or on the cusp of reaching that major milestone, Super Guru says your balance right now should be at least $250,000.
If you’re 55 that amount should be $330,000. Those who, like me, were born in 1965, should have $360,000 put aside.
For 60-year-olds the amount is $449,000 and a 65-year-old should have a balance of $535,000.
Read: Will welfare payment review boost Age Pension?
These figures will give you what Super Guru describes as a “comfortable retirement”. Your definition of ‘comfortable’ may vary of course.
If your super balance exceeds the recommended figure, then a temporary reduction of contributions may help you through the current inflationary period without too much future damage.
For those who come in under the recommended mark, it may be time for serious consideration.
Are you comfortable with your current super balance? Has the cost-of-living crisis caused you to cut back your contributions? Why not share your thoughts in the comments section below?