New findings from UniSuper have revealed a troubling financial picture for many older Australians, with a large share retire with extremely low superannuation balances.
According to the research, 34% of retirees aged 65–75 end their working life with less than $50,000 in super, raising concerns about long-term financial security and growing dependence on the Age Pension.
A Growing Retirement Concern: Low Super Balances Among Seniors
A survey of 3,851 Australians across different age groups highlighted that one in three older retirees holds less than $50,000 in their super accounts. This limited savings pool forces many into greater reliance on government support.
Derek Gascoigne, a UniSuper private client adviser, pointed out that the issue stems from the relatively recent introduction of compulsory super. The system only began in 1992 at a contribution rate of 3%, slowly increasing over time.
“For most people now retiring, super sat at around 9% during much of their working life. Only recently has it reached 12%, so many never benefited from the higher rate,” Gascoigne explained.
Why Today’s Retirees Struggle to Build Super
Gascoigne noted that many retirees never had a full working career under the modern compulsory superannuation contribution rates. As a result, their retirement savings are not aligned with today’s recommended standards.
The maximum Age Pension for singles currently stands at $30,646 per year, which falls short of what experts say is needed for even a minimal level of comfort.
The Association of Superannuation Funds of Australia (ASFA) estimates:
- Modest lifestyle (single homeowner): $34,522 per year
- Comfortable lifestyle: $53,289 per year
With only $50,000 in super plus the pension, retirees may meet the modest benchmark temporarily, but Gascoigne warned that the savings won’t stretch forever.
“That extra $4,000 gap between the pension and a modest lifestyle can be covered, but only for a limited period,” he said. “Without a stronger buffer, unexpected costs later in life become difficult to manage.”
Average Super Balances Are Higher — But Still Insufficient
The Australian Taxation Office (ATO) reports that typical super balances are higher than what many retirees hold:
- Median balance (65–69 years): $208,143
- Median balance (70–74 years): $215,009
These amounts exceed the modest standard of $100,000, but still fall short of ASFA’s comfortable retirement benchmark of $595,000 for singles.
What Older Australians Can Do to Improve Their Retirement Outlook
Gascoigne stressed that retirees with low balances still have choices.
1. Moving From Accumulation to the Pension Phase
Shifting savings into the pension phase can offer benefits such as:
- Tax advantages, helping money last longer
- Structured income payments, which support disciplined spending
This approach replicates the steady cash flow retirees are familiar with from their working years.
2. Maximising Government Support
Retirees should also explore options like:
- The Work Bonus, allowing people to earn without reducing pension payments
- Access to concession cards for discounts on healthcare and essential services
3. Downsizing And the Home Equity Access Scheme
Homeowners may release funds through:
- Downsizing to a smaller home
- The Home Equity Access Scheme, enabling eligible retirees to boost their pension by up to 150% of the maximum rate
Seeking advice from a licensed financial professional or super fund can help individuals understand which strategies suit their circumstances.
Younger Workers Encouraged to Strengthen Super Early
For Australians yet to retire, Gascoigne recommends:
- Making voluntary contributions, when possible
- Reviewing super fund fees, insurance policies, and investment options
- Ensuring that contributions align with long-term retirement goals
He emphasised that even a low balance does not automatically mean an unhappy retirement, especially when supported with smart planning.
Australia’s retirement landscape is shifting, and the revelation that one-third of retirees have less than $50,000 in superannuation highlights a serious national challenge.
While rising pension reliance and insufficient savings are concerning, retirees and future retirees still have meaningful pathways to improve their financial security — from restructuring their super to leveraging government schemes and seeking professional advice.
With informed planning and early action, Australians can build stronger foundations for a stable and comfortable retirement, despite the hurdles of the past system.
FAQs
Why are so many Australians retiring with low superannuation balances?
Because compulsory super only began in 1992 at 3%, many of today’s retirees spent most of their working life contributing at just 9%, far below today’s 12% standard.
Is $50,000 in super enough to retire on?
It may temporarily help bridge the gap between the Age Pension and ASFA’s modest standard, but it will not last long-term and offers little protection against unexpected costs.
What options do retirees with low super have?
They can move super into the pension phase, use government supports like the Work Bonus, consider downsizing, or explore the Home Equity Access Scheme.