If you remember the old TV ad for the launch of the Super Guarantee in 1992, you’ll recall Bob, who watched his super pot grow until he retired with a smile. But as Bob walked out the door, the ad faded—and so did our view of his retirement journey.
That’s a fitting metaphor for where Australia’s retirement system stands today: we’ve helped millions build their nest eggs thanks to compulsory super, but the path into retirement is still far too confusing for too many.
This poses a policy challenge, because Bob is part of a generation about to reach the retirement phase as part of a silver tsunami. It’s a big wave of confusion when you consider over the next decade, 2.8 million Australians will reach retirement age, doubling the number of new retirees each year to 300,000, and the amount they withdraw from super will nearly double to $1.5 trillion.
In the Super Members Council’s recently-launched report – Retirement revolution: Simpler, smarter retirement – our research shows that three-quarters of pre-retirees find retirement products bewildering, and only 16% say it’s easy to understand the tax rules. Even among those already retired, more than half are still unsure about their options.
This confusion matters: a typical retiree could miss out on as much as $136,000 over their retirement simply because the system is too hard to navigate—money that could make a real difference to their quality of life.
The good news is that compulsory super is working. New retirees have more to spend, and fewer Australians rely on the Age Pension, saving taxpayers billions. But the complexity of the retirement phase is costing Australians, and it’s time to fix it.
There are practical, urgent steps we can take now: expanding access to simple, affordable advice and digital tools, safe data sharing, and smart retirement pathways managed by super funds.
Longer-term reforms, for further consideration, should be bold—like automatically removing tax from accounts at age 65 for eligible members, rethinking drawdown rules for those with low balances, and applying a quality filter to all retirement products.
The report also busts the myth that retirees are underspending with SMC analysis showing most are withdrawing above the minimum required. Concern about underspending is an unsubstantiated distraction from the real issue: it’s complexity, not caution, that holds them back.
Australia’s retirement system is at a crossroads. The choices we make now for Bob’s generation will shape the lives of millions to come. It’s time to bring clarity, confidence, and fairness to every retiree’s journey.
