Retirees’ super drawdowns higher than expected

Binaya Dahal

Editorial Intern, Financial Newswire

21 January 2026

More than two-thirds of Australian retirees extracted higher than the minimum amounts required from their superannuation fund in 2024/25, countering the claim that they are underspending their savings.

The recently released report by the Super Members Council (SMC) showed that this proportion was even more substantial at 81% for those with less than $50,000 in super.

According to the council, the drawdown rates were the highest between ages 65 and 69, before falling in the early 70s and rising again in the 80s as health and aged-care costs increase.

Despite this, the study found around 700,000 Australians over 65 have remained in taxed accumulation accounts, paying an average $650 a year more in tax because they have not transitioned to tax-free retirement accounts.

The council said this complexity risks leaving retirees worse off over time, with modelling showing a typical retiree could lose up to $136,000 over their retirement by making sub-optimal decisions or delaying entry into the retirement phase.

The council’s Chief Executive Officer, Misha Schubert said reforms should focus less on encouraging spending and more on simplifying the transition to retirement.

“Retirees are not underspending their super. It’s time we retire that myth and focus on making retirement simpler, easier and more intuitive for everyday Australians,” Schubert said.

“The race is on to get ahead of the coming silver tsunami of retirees. A simpler, smarter pathway to retirement will help more Australians retire with confidence and the certainty they can pay for things they need.”

The findings come as Australia faces what the SMC calls a “silver tsunami” as 2.8 million people are expected to retire over the next decade, taking the annual figure from 150,000 to 300,000 a year.

As the amount of money these retirees will have in super by age 65 will reach almost $1.5 trillion by the next decade, the council has proposed various reforms to prepare the system from faltering.

The recommendation includes simplifying the transition to retirement and automatically making accounts tax-free at age 65 for eligible members.

The SMC also suggested a review and adjustment of minimum drawdown requirements for retirees with low account balances and exploring strategies to encourage drawdowns above the minimum across varying balance levels.