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As Super Fund Collapses Rattle Confidence, SMSFs Emerge as Retirement Engine
Following recent superannuation fund collapses that wiped out more than $1 billion in member savings, new Australian Tax Office analysis shows self-managed super funds (SMSFs) are already playing a growing – and largely overlooked – role in funding Australians’ retirement income.
New data reveals SMSFs are now paying out significantly more in retirement benefits than they receive in contributions, signalling a decisive shift from wealth accumulation to income drawdown.
A new report by financial planner James Hayes, a specialist in superannuation and retirement planning, shows SMSFs have already moved into this retirement phase, highlighting their growing importance at a time when confidence in some super fund structures is under pressure.
The report found:
- SMSFs are now paying out far more than they take in: In 2023–24, SMSFs paid $57.7 billion in retirement benefits, compared with $26.2 billion in total member and employer contributions, meaning benefit payments were around 2.2 times higher than contributions.
- SMSFs are operating as income vehicles, not wealth builders: In the 2023-24 financial year, SMSFs were a net payer, with total outflows of $80.4 billion exceeding inflows of $46.5 billion.
- More than half of SMSF members are already at retirement age: 50.8% of SMSF members are aged 60 or over, 38.2% are 65+ and 16.7% are 75+, reinforcing SMSFs’ role as a retirement-stage structure.
- Liquidity and access to cash remain a priority: Nearly half of all SMSF assets are held in listed shares (28.1%) and cash or term deposits (16.2%), reflecting the need for flexibility as members draw regular income.
- Headline SMSF balances overstate what most people actually have: While the average SMSF holds around $1.63 million, the median balance is closer to $930,000, showing that a small number of very large funds significantly lift the average above what most SMSF members hold.
Hayes says the cashflow data shows SMSFs have already moved into a different phase of their life cycle.
“When SMSFs are paying out more than twice what they receive in contributions, it’s a clear sign they’ve moved into retirement mode. These funds are no longer about accumulation – they’re paying people an income. That makes understanding cashflow, liquidity and risk far more important than headline returns,” he says.
Hayes says the report highlights the importance of understanding the difference between headline figures and real-world balances.
“Average figures don’t reflect the typical SMSF experience. That’s why people need to focus on what their own balance can realistically support, rather than comparing themselves to headline numbers,” he says.
The data shows retirement planning is no longer something that happens at the last minute, adds Hayes.
“What surprises people is how early this shift starts. Many SMSFs are already being structured for income years before someone officially retires, because the decisions you make in your 40s and 50s shape how comfortable retirement actually feels.”
The findings form part of a broader report analysing how Australians are using self-managed super funds heading into 2026, based on the most complete Australian Tax Office data available.
To read the full report, visit the Southern Advisory website.
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About us:
About James Hayes
James Hayes, founder of Southern Advisory, is a licensed financial advisor specialising in self-managed super funds and retirement planning. His work includes analysing Australian Tax Office data to better understand how SMSFs operate at a system-wide level, alongside his work with individual clients approaching or in retirement.
For more information, visit the Southern Advisory website.
Contact details:
Georgia Madden at UR Digital