With property increasingly out of reach for many younger Australians, it means their superannuation balance will be their best asset to build over time. However, they need to be educated about super, and fast!

The Association of Superannuation Funds of Australia (ASFA) tells us that the average super balance is on the rise, but you’d have to be a cockeyed optimist to think the amount we’re talking about is good. And it’s ignorance of the super rules and a pathetic government education program that best explains why these balances are so low.

Sure, while I could argue that the average Australian doesn’t care enough about their super, a part of that is because no politician has ever made an incredible effort to make sure the population became mad keen on super.

And let me say, that while the government website moneysmart.gov.au is very good, the federal government doesn’t spend enough advertising how good it is. Yes, while it could be even more consumer friendly, it has good information that Australians need to be enticed to get exposed to superannuation education ASAP!

Here are the main points that sbs.com.au gleaned from the ASFA’s latest report that relied on the ATO’s look at 2023 figures:

1. Good super funds have returned 7.5% over the past 30 years.
2. That’s despite the GFC and Coronavirus crashes.
3. The average super balance was $172,834 in 2023.
4. It would be higher because workers now lose 12% to super. In 2023, it was 10.5%.
5. The average super balance at ages 60-64 is $355,451. This means such a retiree will need a part government pension to make ends meet in retirement.
6. Those aged over 75 were averaging $492,198, which says something about how super grows. And it comes when people care more about their super and make life changes to ensure it grows.
7. A 30-year-old today with $30,000 in super and earning a median wage will retire with $610,000.
8. At ages 60 to 64, men average about $396,000 in superannuation savings while women average around $313,000. This is explained by lower wages for women, divorces and time out of the workforce — often to have children.
9. The gap between men and women is closing with women now holding 43.6% of the total superannuation assets, up from 41.9% five years ago.
10. Australians on lower incomes will also see a change to their super tax offset, which will increase from $500 to $810 as the government expands the eligibility criteria from a $37,000 cut-off to $45,000.

On this latter super rule, if you earn less than $37,000, you can get up to $500 paid back into your super fund by the ATO to compensate for the 15% tax that all super contributions out of one’s pay are slugged with.

If your fund has a Tax File Number, the ATO will automatically refund this amount to your fund. The cut-off amount goes to $45,000 on 1 July 2027.
This is just one of the many rules that apply to super. Too many Australians have lower super balances than they should have because most of us don’t know the rules/laws that apply to super.

As a financial planner, while I have more experience at investing than my clients, sometimes the biggest help I’ve contributed to building their super is by knowing the super rules around contributing more to super, which has helped push their balances over $1 million and beyond.
While knowing the super rules helps build people’s nest eggs, government education and related marketing is pathetic. Name one government advertisement that encourages people to learn about their super.

All of us can probably recall industry super fund ads that basically say “give us your money because we are cheaper” but no ad that explains why becoming super-smart will be unbelievably rewarding can be recalled because none have been made by neglectful politicians from dumb governments.
Why dumb? Well, if more Aussies had bigger super balances, the outlays on pensions would be smaller.
Well, der!
Of course, while financial advisers know the rules, only 16% of Australians use an adviser. Close to 40% think the cost of financial advice is too high, which actually is false economy, especially when the average retiree ends work with $355,451.

The website ifa.com.au says 10 million Australians want advice but only 3.2 million actually are paying for it. The problem is said to be the cost. While most only want to pay around $1,164 for advice, 57% want to pay nothing!

The only way Australians will be smart enough to grow their super strongly will be via a government program to make us all super smarter. However, what’s the bet no significant politician ever takes this advice?