Are you average?
ESSSuper - 05 Mar 2021
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 |
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.
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