What to do with it while time is on your side, and how to boost it if you think you’re falling short.
If you’re in or nearing your 30s and you’re thinking about your super, that’s amazing. Many people don’t start taking super seriously until they’re getting close to retirement, and by that time it’s generally too late to make the most of all the advantages that a solid superannuation strategy can bring.
In your thirties though, as daunting as the idea might be, you’ve probably got another thirty or so years to really get your super investments working for you, so you can retire comfortably. It’s also a good time to start asking some key questions to help plan for a sweet life after you say goodbye to the daily grind.
How much super should I have at 30?
At age 30, the average super balance is $42,100 for men and $34,500 for women. Based on the average 30yo income of $59,000 , and relying only on employer contributions, this may fall short of the $545,000 target minimum balance at retirement for a single.
That raises a few issues. Firstly, the major difference between men’s and women’s super balances. This is partly because women tend to take more time out of the workforce to raise a family and care for loved ones, and also because women tend to make up a greater proportion of workers in lower paid jobs.
The other issue it highlights is that, even when your employer’s contribution may be up to 12% of your salary, if you don’t top it up yourself, you could still miss out on reaching the minimum target balance for a comfortable retirement when you hit 65 – especially if you’re flying solo.
Average estimated super balances in Australia up to 2020
| Male | Female | |
|---|---|---|
| 15–24 years | $6,500 | $5,100 |
| 25–34 years | $42,100 | $34,500 |
| 35–44 years | $107,700 | $76,900 |
| 45–54 years | $219,300 | $136,000 |
| 55–64 years | $326,200 | $246,300 |
| 65–74 years | $435,900 | $381,700 |
| 75 years and over | $370,900 | $314,100 |
Source: Australian Bureau of Statistics
The good news is...
While you’re in your 30s, there are a number of things you can take control of now to help boost your super for when retirement comes around. And it all comes down to strategy.
What’s a good super strategy at my age?
With around 30 years of super investment to work with, your super strategy as a 30yo will be very different to that of a 60yo. For instance, you have more time to balance out any downturns in the market, so investing more of your super in growth assets, can be less of a risk long term.
That’s why many experts recommend different asset allocations based on age, such as focusing on growth in your thirties and forties, a balanced asset allocation in your late forties and early fifties, and shifting to more conservative assets as you get closer to retirement. MoneySmart has more information about choosing an investment option that’s right for you.
What’s more, the returns your investments earn compound year upon year – and across three decades – that can lead to a lot of growth. In fact, at a modest 4% per year on average, every dollar invested in super now, will have tripled after 30 years.
What do I do if my balance is lower?
If your super balance isn’t where you’d like it to be, or you’re thinking of taking time out of the workforce, or changing to a less stable income in future, there are some tried and tested strategies you can put in place now, while you still have plenty of time to build a good nest egg:
- Salary sacrifice: This involves contributing a portion of your pre-tax income into your superannuation account. By doing so, you may reduce the income tax you pay now, and boost your super balance for the future – win-win!
- Consolidate your super: Check to make sure you don’t have multiple super accounts. This often happens if you’ve had different jobs, and plenty of people forget about their old super. Consolidating these accounts into one super fund that fits with your ideals can help you save on fees and simplify your paperwork – best of all, super funds can often do it all for you. Just make sure you understand the differences between super funds, which can include things like fees, investment options, and insurance.
- Choose the right investment option: Super funds offer various investment options with different levels of risk and potential returns. Choosing the right allocation for your risk tolerance and retirement goals can help maximise your superannuation balance.
- Stay engaged with your super: If you’ve read this far, you’re probably already engaged, so you’re well on your way, and probably more in tune than your mates. So, keep on reviewing your super balance, investment options and fees regularly to make sure you’re on track to reach those idyllic retirement goals.
In addition to the above strategies, it is also important to remember that superannuation is not the only source of retirement income. Other income may include personal savings and investments, property and even the age pension – all of which can come into the picture over the next 30 years, and could help enhance your retirement income and lifestyle.
Choose the super fund for you in your 30s
Finding the super fund that meets your needs is an important part of building long-term financial security. There are 100s of super fund options to choose from – so make sure you do your research and learn about your options so you can pick the best one for you.
MoneySmart has some pointers for where you could continue your search.
In 2022, Spaceship was awarded 'Best Value Super Fund for Young People'‘ by Money Magazine, and is AAA-rated by Rainmaker. We offer two great, pre-packaged super options that are as simple as they are forward-thinking. So, come aboard and find out where your super could take you.
