A landmark new report finds new middle and low-income retirees in the middle wealth group have been the biggest beneficiaries of compulsory super, with an extra $11,388 to spend each year on things they need or love like living costs, holidays and making memories with family.
SMC analysis also finds without compulsory super, half a million more Australians - 512,000 - would rely on the Age Pension, costing taxpayers $12 billion in 2026-27, rising to $14 billion in 2028-29.
The Super Members Council's Retirement Revolution: Super's Coming of Age report is the first sweeping study on Australia's retirement incomes since the Government's Retirement Income Review in 2020.
It publishes first-of-its-kind modelling by SMC, showing the newest retirees in the middle wealth group were receiving an average of $20,800 a year more in super income than similar retirees two decades ago and $11,388 extra after accounting for lower Age Pension entitlements.
Over the past two decades, super balances have more than tripled for middle wealth retiree households and more than doubled for the second-lowest wealth retiree households.
As each successive generation retires with super, the evidence shows this money is lasting longer into their retirement years, with the proportion of people in their 70s with super income tripling over the past 20 years.
Before the introduction of universal super with the Super Guarantee laws in 1992, financial assets were concentrated in the wealthiest 10% of households. Fast forward three decades, and they are spread across every income group, thanks in large part to super.
While super is transforming retirement for many, the report highlights some groups remain vulnerable.
Retirees who rent, live alone, or retire involuntarily due to health or caregiving responsibilities, face significantly lower incomes and wealth. Retired renters for example, have median incomes three times lower than homeowners and median wealth nearly 30 times lower.
Women, single retirees, and those in insecure work are also more likely to be knocked back by unpaid super, lower lifetime earnings, and less access to tax concessions than higher-income Australians. These gaps underscore the need for targeted reforms to ensure super delivers for all Australians.
Australia's ageing population, rising mortgage debt in retirement, and complex system settings will place increasing pressure on the retirement income system.
Without reform, the gender and housing wealth gaps will widen, and the system's sustainability could be undermined.
Super Members Council CEO Misha Schubert says the super system is doing what it was designed to do to transform incomes and standards of living for everyday people, but there is more work to do.
"Australia's super system is lifting the retirement incomes for millions of everyday Australians, ensuring they have more money for the things they love and need," she said.
"Without super and with Australia's population ageing, the Age Pension would be under enormous strain, leaving the Budget worse off and less money to spend on things like health, education, roads and rail."
"Super is one of Australia's great social and economic success stories. It's time to build on that success and ensure it works even better for those who need it most."
The opinions above are those of the author in their capacity as spokesperson for Super Members Council (SMC). SMC, the authors and all other persons involved in the preparation of this information are thereby not giving legal, financial or professional advice for individual persons or organisations.
