Retirees May Pay Too Much Tax by Leaving Super in Accumulation

Up to 700,000 retirees could be paying more tax than they need to, the Super Members Council said in January 2025.

Key Facts

• Who: about 700,000 Australians over 65 not working full-time
• Issue: super left in accumulation phase
• Average extra tax: about $650 a year
• $100,000 could mean up to $4,500 extra over retirement
• $200,000 could mean up to $9,000 extra

Accumulation vs Retirement Phase

In accumulation, earnings are taxed at up to 15 per cent. In a retirement phase account, the ATO does not tax earnings, the council said.

What You Can Do

• Check what phase your super is in
• Talk to your super fund
• Get financial advice if you are unsure

Frequently Asked Questions

How many retirees are affected?

About 700,000, the Super Members Council said.

How much extra tax?

About $650 a year on average.

What should I do?

Ask your super fund about moving to retirement phase.

Conclusion

A simple check could save retirees money.

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