Baby boomers’ super savings lag
Baby boomers may be the wealthiest generation but few of them can afford to retire early based on their superannuation savings, says the National Centre for Social and Economic Modelling.
The average superannuation account balance for a 56-year-old is just $60,000, if they retire now. The youngest male baby boomers, now aged 38, will have an average $172,000 in super and the women just $87,000 when they're 56 in 2020.
This does not take into account assets and savings accumulated outside super which make up the bulk of investment for many baby boomers. The average annual income for that age group now is $42,000.
Financial planners suggest that retirees need 60 to 70 per cent of what they earned at work to live, so someone on $42,000 would need $25,000 to $30,000 a year in retirement. This is unattainable on current super even if they get the age pension, now $11,000 per annum. The only way to achieve a better standard of living in retirement is to work until 65. On current savings, men would then have $205,000 to live on and women $99,000.