1 In 4 Australians Don’t Have Enough Super Or Assets To Retire
A comfortable retirement in Australia costs $70,806 per annum for couples and $50,207 for singles
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Almost one in four Australians say they do not have enough superannuation or other investments to get by in retirement, according to a survey by Finder. When extrapolated to a population level, this indicates that 4.6 million people are facing up to a financially difficult future.
A further 27% said they were not sure if they would have enough in superannuation to retire. Just 17% said they were confident they would have enough wealth for retirement, while a further 22% said they would have enough in super but would cut back on spending.
One in 10 said their superannuation balance was too low but they had other investments that would provide enough income or capital to fund their retirement.
“Superannuation is something many Australians, including the younger demographic, don’t engage in enough,” said Sarah Megginson, Finder’s money expert. “It can be a sad case of ‘too little too late’ for many who realise that by the time they reach retirement age, their super balance will fall well short of the amount of money they will need.”
According to the Australian Retirement Standard, a ‘comfortable’ retirement costs $70,806 per annum for couples and $50,207 for singles. A modest lifestyle costs $45,946 and $31,867, respectively. The superannuation balances required for a comfortable retirement are $690,000 for couples and $595,000 for singles by age 67. For a modest lifestyle, both couples and singles need a superannuation balance of $100,000.
Currently, the full pension including supplements is $42,988 per annum for couples and $28,514 for singles. However, income and asset tests apply. A couple with their own home is eligible for the full pension if their combined assets (excluding their home) are worth less than $451,500 and they earn an annual income below $9,360. If they do not own a home, the threshold is $693,500. For a single homeowner, the asset limit is $301,750 and the income limit is $5,304. For single non-homeowners, the asset threshold is $543,750.
Ms Megginson said Australians needed to assess their superannuation carefully. “First, it’s essential to know how much you have in super and to consolidate your funds,” she said. “You pay fees for each fund you have – it’s like having your savings split across three savings accounts and paying account-keeping fees on all of them.”
Ms Megginson suggested workers contribute to their super through salary sacrifice or voluntary lump-sum payments. An earlier Finder survey conducted in June 2022 found 46% of Australians do not make additional contributions to super. In FY23 and FY24, taxpayers are allowed to contribute a total of $27,500 per annum concessionally (meaning less tax) incorporating compulsory super paid by their employers and other payments and benefits.
“For instance, if you salary sacrifice $1,000 over 12 months, you’d pay $150 on that income and $850 will go to super where it will be invested for your future. Otherwise, you’ll pay $325 tax on that money and have $675 in your bank account. Any income earned within your super is capped at a maximum tax rate of 15% per annum. If you currently pay say 32.5% tax, you’re ahead immediately.”
Megginson warned workers to compare their super fund’s fees to other super funds. “Make sure you aren’t stuck in a fund charging exorbitant fees and check regularly that your employer is paying your 11% Superannuation Guarantee contributions on time.”
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U.K.-listed mining giant’s chairman says the proposal undervalues the company
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LONDON— Anglo American on Friday rejected a $39 billion takeover proposal from rival BHP, saying the bid “significantly undervalues” the company and setting the stage for a potential bidding war.
London-listed Anglo American said the unsolicited proposal, which was made earlier this month and which became public this week, features an unattractive structure that is too uncertain and complex .
Anglo American Chairman Stuart Chambers said the company stands to benefit from its portfolio of assets, including copper, that are likely to experience growth from trends around the energy transition. BHP’s bid, Chambers said, is opportunistic and dilutive for shareholders.
BHP’s all-share offer valued Anglo American at about $38.8 billion, and would have been contingent upon Anglo American spinning off shareholdings in two South African-listed units. The proposal represented a premium of about 31%, not including the South African-listed units, based on Tuesday’s closing prices.
Some analysts had predicted Anglo would find the bid too low and are expecting BHP to return with another. BHP has until May 22 to make a firm offer, though the deadline can be extended. Industry participants expect other large miners to also take a run at Anglo, whose share price has dropped since 2022 as lower commodity prices have ripped through the industry.
A tie-up between BHP and Anglo American, which would be the largest mining deal on record, would illustrate the growing importance of copper, a metal essential to clean-energy products , to a sector that has long relied on Chinese industrialisation to boost profits.
Copper represents some 30% of Anglo American’s output, while BHP counts a majority stake in Chile’s Escondida, the world’s biggest copper mine, among its assets. BHP bought Australian copper-and-gold miner Oz Minerals for $6.34 billion in May last year, representing its biggest acquisition since 2011.
Copper prices are up some 15% so far this year, reflecting expectations that demand for the metal will rise as the world decarbonises and supply will be constrained. Electric vehicles and wind farms use copper in much greater quantities than gasoline-powered cars and coal-fired power stations.
Anglo American has been reviewing its assets in recent months, and has held early conversations with potential buyers for its storied De Beers diamond unit, which it values at more than $7 billion, The Wall Street Journal reported Thursday.
Activist firm Elliott Investment Management holds a stake in Anglo American worth roughly $1 billion, accumulated over several months and before BHP’s move on the miner, according to a person familiar with the matter. The firm is widely known for its campaigns to push companies for change to boost their stock prices. Its view of the Anglo American holding couldn’t be learned.
That said, a jump in Anglo American’s share price following BHP’s takeover offer indicates Elliott has already profited from its holding, potentially reducing any incentive for it to take any action until the outcome of BHP’s bid becomes clearer.
Anglo’s stock on Friday traded above the implied value of BHP’s offer, indicating the market expects a higher bid to emerge.
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