Deloittes, one of the big accounting firms in Australia, has just released its annual review into how super is meeting retirement needs.  There are a few gems (and a lot of boring stuff too!)

How much you need to retire -

Based on life tables, a 65 year old needs around $340,000 to draw down a 'modest' $20,000 a year.  A 'comfortable' lifestyle needs nearly $600,000, producing about $41,000 a year.  (We suggest around $800,000 as a preferred sum, which allows for more choice).

But ….. most people don't have anywhere near that -

The average capital is only $85,000, and even for those with some years before retirement they still will not have enough in their balance to fund retirement.

Gen X is looking better -

A 30 year old earning $60,000 a year (the average now) could retire with $1.1 million.  This will last them for 26 years of comfortable retirement, to 94 if living modestly.

Superannuation hasn't recovered well

The 3 years of GFC caused some big losses and funds need time to recover, perhaps another 3 years.

Industry funds

Many are growing strongly in number, due partly to innovation and choices in investment, and by reducing their high fees/costs, and being better value.

SMSF

Still growing strongly, earning better than industry funds.

A SMSF is usually the employer taking responsibility for their own retirement, so contributions are partly based on tax savings as well as savings for retirement.  Employees tend not to contribute anything other than the employer levy, now 9.25%, which fits with Joe Hockey's recent statement "….. created an attitude of entitlement."

Some may recall when super was introduced by Keating; to be paid 33% by Government, the employee 33%, and the employer 33%.  Now super action seems to be about government making sure the employer puts in 100%.  And just this week, the morons in the RBA believe there should be an inquiry as SMSF's are buying property.  But, this is really evidence of investors making rational choices based on the incentives provided.  You can't believe that these people are in charge of more than their lunch money.

(PS: the last two paragraphs are rants from me, not from the Report).

SMSF Super needs to be properly planned and not ad-hoc, considering the time span, needs of the members, and the risks inherent in various choices.  Employee Super is going to continue being a significant cost to employers, which has to be allowed for in budgets and costs.