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200k more HESTA members are ‘retirement ready’
The $87 billion fund has said that many of its members are expected to achieve a “comfortable” retirement lifestyle.
The super fund has announced 200,000 more of HESTA’s members are now on track to be ready for retirement.
Using a specially developed in-house model, HESTA said that over the past seven years, it has been able to track its members’ “retirement readiness”. Since 2016, an extra 196,500 members have improved on this measure, shifting from a projected “modest” to a more “comfortable” retirement lifestyle.
CEO Debby Blakey said that the improvement was due to a combination of members engaging more with their super, HESTA’s financial support services, and the fund’s long-term investment performance.
“It’s incredibly rewarding to see that the HESTA team’s purposeful efforts to better support its members are making a tangible difference to their long-term financial futures,” Blakey said on Monday.
“When members feel more confident about their superannuation options, they can achieve better financial outcomes, but we’re acutely aware much more needs to be done. Many of our members face lower wages, financial and career challenges, and time out of the workforce for caregiving, all of which impact their superannuation outcomes.”
HESTA’s in-house retirement model is informed by the Association of Superannuation Funds of Australia (ASFA) retirement standard, whose most recent data showed that the cost of funding a comfortable retirement increased by 3.7 per cent over the last 12 months.
According to ASFA, budgets rose by 0.9 per cent for both singles and couples during the June quarter, with couples around the age of 65 now needing $73,337 per year to enjoy a comfortable retirement, while singles require $52,085.
HESTA also said that its members are predominantly low and middle-income working women and come from every stage of working life, with four-fifths of them being women who often work in low-paid roles.
According to the fund, this segment of their membership earns 16 per cent less than their male counterparts on average and is more likely to have lower account balances when they retire compared to their male counterparts.
“Many HESTA members spend considerable time in unpaid care work, which adds enormous economic benefit to the country at the expense of their own financial security,” HESTA said.
Blakey said that several factors were thus driving the improvement of retirement readiness, including more members making extra contributions to their retirement savings.
“The proportion of HESTA members making extra contributions to their retirement savings has increased substantially from 2016 to 2024, but we understand cost-of-living pressures are making it tough for many of our members to do this,” she said.
“We want all HESTA members to know that there’s always something they can do to improve their long-term financial future, and we’re here to help. We see every day how powerful it is for members when they put a plan in place to help them confidently face the future.”
AUTHOR
Jessica Penny
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