Australians could miss out on more than $130,000 in retirement because of the "daunting complexity" of the superannuation system, according to a new report.
The report by industry peak body the Super Members Council (SMC) calls for reform to simplify the system and make financial guidance more accessible as Australia faces what it has called a "silver tsunami".
This wave of retirement over the next decade will see 2.8 million Australians leave the workforce, according to the SMC, which predicts a doubling of the annual number of retirees from 150,000 to 300,000.
It estimates that over this same period, the collective amount these retirees will have in super will double from about $750-800 billion to about $1.5 trillion over that same period.
But it also predicts that a typical retiree could miss out on as much as $136,000 — or $6,500 a year — over the course of retirement unless changes are made.
The report cautions that "without new solutions, our current retirement system will continue to impose too much complexity on retirees, which is overwhelming for all but the most financially confident".
SMC chief executive Misha Schubert said the findings highlight "with fresh urgency" the need for a simpler, more intuitive retirement system.
"We need to make the shift into retirement so much simpler, easier and more intuitive for everyday Australians," she said.
"This challenge is now incredibly urgent as almost three million Australians start to race towards retirement in coming years."
Retiring 'with confidence'
The report also points to rising challenges as Australians live longer and retire with higher levels of debt.
More than 40 per cent of households approaching retirement now have a mortgage, while many struggle to navigate how super interacts with the age pension.
Despite strong demand for assistance, few retirees seek professional advice. More than 80 per cent of pre-retirees said they would use free financial guidance from their super fund, but only half would pay for detailed advice.
Proposed reforms include automatically removing tax from eligible accounts at age 65, reviewing minimum drawdown rules for low-balance retirees, and introducing quality standards for retirement products.
The report also claims to dispel the "persistent myth" that retirees underspend their super.
In the 2024–25 financial year, 64 per cent of retirees with tax-free accounts withdrew more than the minimum required, rising to 78 per cent among those with balances below $50,000, according to the SMC report.
"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 their later years," Schubert said.
The Association of Superannuation Funds of Australia estimates that the lump sum needed at retirement to support a comfortable lifestyle is $690,000 for a couple and $595,000 for a single person, according to data from the March quarter 2025. This assumes home ownership and a partial age pension.
Meanwhile, Treasurer Jim Chalmers has confirmed that a new round of consultation on the superannuation performance test — a regulatory assessment — is underway.
"The goal is to refine and strengthen the performance test to make sure it isn’t creating unnecessary obstacles to investment, particularly in key areas like housing and energy," he said at the Australian Chamber of Commerce and Industry gala dinner in Canberra on Wednesday night.
"It's about better aligning and unlocking investment that also boosts productivity, while maintaining a robust test and a primary focus on member returns."
$19 billion in lost super
The new report comes after the Australian Taxation Office (ATO) revealed on Wednesday there is almost $19 billion in lost and unclaimed superannuation waiting to be reunited with more than 7 million people.
ATO deputy commissioner Ben Kelly said lost or unclaimed super can occur when accounts become inactive and funds lose contact with their members.
"Checking for lost or unclaimed super is like reaching into your pocket and finding a $50 note — it's your money, you just didn’t know it was there," he said.
The ATO estimates that around four million Australians hold two or more super accounts, increasing the risk of duplicated fees and lost balances.
The average amount of lost or unclaimed super is $2,590, which could grow to tens of thousands by retirement if left unclaimed, according to the ATO.
This article is general information. Please see a professional if you need financial advice.
