The incremental increase in the Superannuation Guarantee (SG) from 9.5% to 12%, as outlined by initially proposed policies under the Rudd government and later enacted by the Morrison government, has directly impacted this optimistic forecast. This gradual hike, increasing by 0.5% annually, will conclude on July 1, 2025, marking a significant milestone in Australian retirement policy.
For a 30-year-old with an annual income of $100,000, this elevation in the SG rate translates to an additional $125,000 upon retirement. Anne Fuchs, Executive General Manager for Advocacy and Impact at the Australian Retirement Trust, likens this increase to 'reaching the summit of one's financial Everest'. Since its inception in 1992, the SG has transformed from a modest 3% into a robust system crucial to the nation's retirement landscape.
Research by the Association of Superannuation Funds of Australia (ASFA) supports these findings, estimating that a median worker earning $75,000 annually will boost their superannuation by approximately $20,000 at retirement. This predicted growth will allow an average retiree to exceed the $595,000 threshold needed for a secure retirement, making a substantial difference for many Australians.
Couples are positioned even better, with ASFA proposing a comfortable retirement figure of $690,000, assuming combined superannuation funds and age pension top-ups. However, the figures hinge critically on homeownership by retirement age, an often-overlooked factor.
Despite these promising numbers, a call to action remains for Australians to stay informed about their superannuation status. A survey by the Australian Retirement Trust highlights that four out of five individuals are unaware of their superannuation contributions, with only 20% able to pinpoint the current guaranteed rate correctly.
Fuchs emphasizes the significance of this understanding, needed both for personal financial decisions and wider societal preparedness as Australia’s demographic changes. It's imperative that workers and policymakers ensure the Superannuation Guarantee adapts effectively as the nation evolves.
