Six-figure warning as 'silver tsunami' of 2.8 million Aussies head for retirement

Thursday, 30 October 2025 07:59

A typical new retiree could lose out on as much as $136,000 over the course of their retirement.

A typical new retiree could lose out on as much as $136,000 over the course of their retirement due to the bewildering complexity of Australia's superannuation system, according to a new report.

The staggering figure—equivalent to $6,500 a year—was highlighted in modelling released today by the Super Members Council, which found the system's "daunting complexity" is stopping everyday Australians from achieving their full financial potential in their post-work years.

Australia is on the cusp of a "silver tsunami," with 2.8 million Australians racing towards retirement in the coming decade. This influx will effectively double the number of Australians retiring each year, jumping from 150,000 to 300,000.

Reform is needed to fix Australia's overly complex superannuation system, a new report has found.

The amount of money in super held by these retirees will almost double, too, soaring from around $750 billion over the past decade to almost $1.5 trillion over the next.

In its report, the Super Members points to the current complexity and rigidity of the system as a significant barrier to a simple, seamless transition into retirement for many.

One critical finding reveals that about 700,000 Australians over 65 who aren't working full-time still have their super sitting in taxed savings-phase super accounts, which drastically lowers their disposable income in retirement.

The report calls for a series of urgent, short-term reforms to prepare the super system, including the need to:

Expand access to simple, affordable financial advice and digital tools.
Enable safe and effective data sharing with Government to allow funds to optimise incomes and offer retirement income dashboards.
Support Smart Retirement Pathways and suggest the best retirement income solution for members.
Fix issues that lead to dual super accounts for retirees.

For the longer term, the council proposes bolder directions, such as simplifying a transition to tax-free income—including considering automatically removing tax from accounts at age 65 for eligible members—and rethinking minimum drawdown requirements for poorer retirees. It also recommends strengthening consumer protection by applying a quality filter on all retirement products.

Dispelling a "persistent myth" that most retirees underspend their super, the report actually shows that drawdowns are typically higher than the minimums required. In 2024–25, approximately 64 per cent of tax-free retirement account holders (two in every three retirees) withdrew above the minimum. This proportion was even higher for those with less than $50,000 in super, at 77 per cent.

"We need to make the shift into retirement so much simpler, easier and more intuitive for everyday Australians," Super Members Council CEO Misha Schubert said.

"This challenge is now incredibly urgent as almost 3 million Australians start to race towards retirement in the coming years."

"Moving to a system of simpler, smarter pathways into retirement would mean every Australian could retire with confidence, knowing they're not missing out on money to pay the bills and enjoy life to the fullest."

The report's findings echo a report by the Grattan Institute, released in January, which found the complexity in Australia's superannuation system was leaving retirees stressed and lacking the confidence to spend their super savings.

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