Disclaimer: This article is general and does not constitute financial advice. Please consult a qualified financial adviser for advice tailored to your personal needs.

For seniors keeping an eye on the news lately, a major shake-up could be imminent to Australia’s superannuation system.

The looming change recently got many retirees and soon-to-be retirees feeling uneasy.

What does this really mean for seniors, and should everyone be worried?


The government’s proposed superannuation tax change could take effect from 1 July.

While it is still pending final legislation, it could have a significant impact on how nest eggs are taxed in retirement.

Under the current rules, earnings on your superannuation in the accumulation phase are taxed at 15 per cent.

However, the new proposal would double the tax rate to 30 per cent if a super balance exceeds $3 million.


Financial adviser Josef Jindra summed up the mood among his clients.

‘They have played by the rules, made sacrifices, and now they’re facing a significant increase in tax on a portion of their hard-earned retirement savings,’ Jindra shared.

According to government estimates, about 80,000 Australians, or roughly 0.5% of the population, currently have super balances over $3 million.


The Association of Superannuation Funds of Australia (ASFA) also stated that the average super balance for men is $182,667, with a median of $66,159.

Meanwhile, women have an average superannuation balance of $146,146, with a median of $52,075.

For most Aussies, this tax change should not have any immediate impact.

However, the $3 million threshold should not be indexed to inflation.

As wages and super balances grow, more and more people could find themselves bumping up against that cap.

Modelling by AMP Capital’s deputy Chief Economist Diana Mousina suggested that a 22-year-old starting work today could retire with more than $3 million in super.

The cause of growth could be through wage increases and compound interest over time.


For seniors with a super balance approaching or exceeding $3 million, it’s time to be proactive.

Jindra shared some of his advice for Australians, especially seniors, who are worried about this change.

‘This may include planning withdrawal strategies to stay below the threshold, diversifying investment holdings outside of superannuation to enhance flexibility, and reducing exposure to the higher tax rate,’ Jindra advised.

‘Estate planning has also become increasingly important to ensure assets are structured in a tax-effective way for future beneficiaries.’

Self-managed super funds or SMSFs are also an option for those who want more control of their superannuation.

‘In the end, while the increase in the tax rate is a significant development that warrants attention, it’s not cause for alarm for most,’ Jindra concluded.

However, the looming change is a reminder to keep an eye on superannuation balances, review investment strategies, and consult a financial adviser for a more tailor-fit approach should these changes kick in.
Are you worried about the new super tax changes? Do you think the $3 million cap is fair, or are you concerned about what it means for your retirement plans? Have you already made changes to your super strategy in response to the news? Share your thoughts and opinions about these changes in the comments section below!