The legislated increase in the super guarantee (SG), which will rise in annual 0.5% increments from 1 July, will mean an extra $19,000 in the average Australian worker’s super nest-egg at retirement, according to the analysis by the Association of Superannuation Funds of Australia (ASFA).
The study, which looked at the impact of the 1 July increase in the SG to 10% on retirement balances, said the long-term benefits of the system reaching 12% on 1 July, 2025 would be even greater.
“For the average Australian worker, the change will mean an extra $85,000 in super at retirement,” ASFA deputy chief executive and chief policy officer, Glen McCrea, said.
"By 2050, that number is set to double as a result of the super system moving to 12%. It’s a significant shift which will underpin Australia’s fiscal sustainability by diminishing the reliance on the age pension.”
ASFA’s examination of the impact at retirement of the SG increases for an average 30-year-old worker, living in various states across the country.
The increase in the SG to 12% would also double the proportion of Australian workers who would reach the ASFA Comfortable Standard at retirement set at $545,000 for a single person.
According to ASFA, currently only 25% of Australian population were in apposition to self-fund their retirement.