Are you average?


ESSSuper - 05 Mar 2021

Are you average?

The word "average" has many connotations.

Mathematically, terms like "average", "median", and "norm" mean something that represents a middle point. And while some people embrace normality in many aspects of their life, most people believe they need to strive to earn more.

Michael Jordan, former professional basketball player, famously said "All I knew is that I never wanted to be average." But inspirational quotes such as this imply there's something wrong with being average.

And in reality – how does your income compare? Are you earning the average, and what does that mean for your lifestyle in retirement?

An average income

The question of how much you earn is one that many Australians are uncomfortable discussing, even among their closest family and friends. This can create a false view of where you sit on our society's income scale.

In a poll conducted by University of New South Wales (UNSW), the overwhelming majority of the survey's respondents, some 92 per cent, thought they sat in the middle 60% of households ranked by income. As the survey ranged across all income groups, that's a statistical near-impossibility. In reality, around a third of those surveyed had misjudged how far above or below the centre they really were. According to the University's Professor Peter Saunders, "Most Australians have a greatly distorted impression of where their incomes place them relative to others… Almost no one thinks they are in the bottom, and even fewer think they are in the top 20%."

According to the latest figures (released 25 February 2021) by the Australian Bureau of Statistics (ABS), the median income in November 2020 was $1,711.60 per week, or about $89,003 a year.

But income doesn't exist in a bubble. It's influenced by a multitude of factors, including the industry you work in, your age, location, gender, and other variables – such as a global pandemic. For example, the median men's seasonally adjusted earnings in November 2020 were $1,526.60 per week, compared to $1,050.80 for women.

Average income (before tax) by age*
Age Average annual income
20 and under $19,916
21 to 34 $58,604
35 to 44 $78,156
45 to 54 $80,288
55 years and over $71,396
 
Average income (before tax) by location*
State Average annual income
ACT $78,800
Northern Territory $76,700
Western Australia $72,700
New South Wales $68,000
Victoria $65,600
Queensland $65,300
South Australia $59,900
Tasmania $56,700

* Source: Australian Bureau of Statistics (ABS). Reference period: May 2018

The ABC also offers an income comparison calculator which may give you a snapshot of how you compare to other Australians.

Data from the Australian Bureau of Statistics shows that average weekly disposable household incomes have grown by only $44 over the past decade. Australia's slow wage growth is a well-documented problem. Not only can it cause struggle now, but it can impact your future, including superannuation.

An average retirement

Retirement means different things to different people – there's no "average" retirement. You can put your dreams into action: travel, have more time with loved ones, volunteer to work with charities, join a choir, or just relax. Working out the lifestyle you want in retirement will help give you an idea of how much you'll need to fund it each year.

ESSSuper Financial Advisers warn that it's very difficult to generalise about the amount of money people need at any age. Budgeting is an individual process, and they meet with members who can live very comfortably on the age pension, while others feel they need much more for a comfortable life. "How much do you need?" could be one of the first questions our advisers ask any member who comes to see them, and it's something everyone needs to work out as an individual or couple.

Our website can give you further information about determining how much you may need in retirement, and how long your money might last.

The good news is that as an ESSSuper member, you're already on the path to the lifestyle you want in retirement – whether it's "average" or not! But what else can you do? Find out more about where to start.

We can help

We've developed AssistMe; a smart, easy-to-use interactive tool designed to show you possible retirement income forecasts. Available through Members Online, this tool lets you change factors such as your income, risk appetite, contributions, working hours, and retirement date to model your desired retirement income forecast. A wealth of information, tools, and other resources are also available to help explain the complexities of super. AssistMe is all about empowering you to take control of your retirement journey.

Our expert Member Education Consultants can provide you with information and general advice on our products. To discuss your personal needs, objectives, and financial situation, our Financial Advisers can help.

 

Take control of your retirement

Access AssistMe anytime through Members Online

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For more information, our expertise is always close at hand

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ESSSuper Financial Advisers are authorised representatives of Link Advice Pty Ltd (Link Advice). Link Advice holds a current Australian Financial Services Licence No. 258145 and is responsible for the financial services provided to you. ESSSuper has an arrangement with Link Advice Pty Ltd to provide financial advice to ESSSuper members. ESSSuper pays Link Advice a fee for this service. Neither the Board, nor the Victorian Government, guarantee or endorse any recommendations made by Link Advice, or are responsible for the advice and actions of Link Advice.

Emergency Services Superannuation Board (ABN 28 161 296 741), the Trustee of the Emergency Services Superannuation Scheme (ABN 85 894 637 037) (ESSSuper).

The information contained in this article is of a general nature only. It should not be considered as a substitute for reading ESSSuper’s Product Disclosure Statement (PDS) that contains detailed information about ESSSuper products, services and features. Before making a decision about an ESSSuper product, you should consider the appropriateness of the product to your personal objectives, financial situation and needs. It may also be beneficial to seek professional advice from a licensed financial planner or adviser. An ESSSuper PDS is available at esssuper.com.au/pds or by calling 1300 650 161.

Topics:

  • General
  • Superannuation

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