Are you making this costly error with your retirement savings? Some could lose up to $136,000!

Decades of hard work and careful saving can vanish quietly if your superannuation isn’t managed correctly.

Thousands of Australians are discovering the system’s complexity is quietly eroding their retirement nest eggs.

The last thing anyone wants is to face retirement wondering where their money went.

A landmark report from the Super Members Council warns that a typical retiree could lose as much as $136,000—or $6,500 a year—over the course of retirement due to superannuation complexity.

That’s the difference between a secure, comfortable retirement and one spent counting every dollar.

Australia is entering what experts call a 'silver tsunami', with 2.8 million Australians expected to leave the workforce over the next decade, doubling the number of annual retirees from 150,000 to 300,000.

The total superannuation wealth of these retirees will nearly double from $750-800 billion to approximately $1.5 trillion, creating unprecedented strain on a system not designed for such scale.

Research from the Grattan Institute shows around 80 per cent of Australians find retirement planning complicated, and 60 per cent expect retirement to be financially stressful.

The losses retirees face don’t happen overnight—they are cumulative, small missteps that add up.

Approximately 700,000 Australians over 65 who aren’t working full-time still have their super in taxed accumulation accounts rather than tax-free pension accounts, reducing their disposable income.

If your super remains in an accumulation account past 65 while you aren’t working full-time, you are paying tax on investment earnings that should be tax-free.

Over years, these unnecessary payments can amount to tens of thousands of dollars that could have remained in your pocket.

The Association of Superannuation Funds of Australia estimates that a comfortable retirement requires $690,000 for a couple and $595,000 for a single person, assuming home ownership and a partial age pension.

For many Australians, losing $136,000 to system complexity could turn a comfortable retirement into one fraught with financial anxiety.

Analysis shows that for those aged 60-64 in 2003-04, average super balances grew by 37 per cent in real terms by the time they reached 76-80 in 2019-20, highlighting how uncertainty prevents retirees from spending their savings.

The government and industry are taking steps to address these issues.

Treasurer Jim Chalmers confirmed a new round of consultation on the superannuation performance test to refine and strengthen it and avoid unnecessary obstacles to investment.

The Grattan Institute has proposed converting 80 per cent of super balances above $250,000 into lifetime annuities, with the remainder in account-based pensions to maintain flexibility, potentially boosting retirees' incomes by up to 25 per cent.

Contrary to the myth that retirees hoard super as inheritance, 64 per cent of tax-free retirement account holders withdrew well above the minimum pension amount in 2024-25.

Confidence and clarity in retirement finances lead to appropriate spending—but the system often fails to provide this.

The ATO estimates around four million Australians hold two or more super accounts, with an average lost or unclaimed super of $2,590, which can grow to tens of thousands by retirement.

ATO deputy commissioner Ben Kelly said, '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'.

The Super Members Council recommends urgent reforms: expanding access to affordable financial advice and digital tools, enabling safe data sharing with government, supporting smart retirement pathways, and preserving retiree choice.

The challenge is enormous, but the opportunity is too: nearly three million Australians approaching retirement with unprecedented super wealth could enjoy secure retirements if the system improves.

Getting it wrong risks each retiree losing an average of $136,000 they can ill afford to miss.

The story doesn’t end with system complexity—this video shows how real people have lost millions to superannuation failures, revealing just how vulnerable retirement savings can be.

Watch the full report to see how easily it can happen—and what you can do to protect your own nest egg.

If you’re concerned about how superannuation could be quietly reducing your retirement savings, there’s more to learn about practical steps you can take.

A helpful story breaks down real-life examples of mistakes retirees make and how to correct them before it’s too late.

It’s a useful follow-up to understand strategies for getting your super back on track and maximising your nest egg.

Read more: Retirees, your Super could be working against you—here’s how to get it back on track

Have you experienced confusion or lost money due to superannuation complexity?