It’s been a messy year for superannuation — scandals, political fights, and even a few fund collapses. Yet, despite all the noise, experts say walking away from super could be one of the worst financial moves Australians make. Beneath the chaos, the numbers still tell a surprisingly reassuring story.
Superannuation’s Year From Hell
To say 2025 tested Australians’ faith in super would be an understatement. The collapse of the Shield and First Guardian funds saw more than $1 billion in retirement savings vanish overnight. Add to that a fierce political battle over a new tax on high super balances, and it’s no wonder many people began questioning whether their savings were safe.
But while the headlines focused on failure, the performance data told another story. Most super funds actually ended the year in positive territory, with many balanced options notching returns close to 10%. The recovery of global sharemarkets helped offset local volatility, keeping long-term investors well ahead.
Super may have taken a few bruises, but for the majority of Australians, it quietly kept doing its job — building wealth behind the scenes.
The Real Power: Tax, Not Just Returns
The secret to super’s staying power isn’t just performance — it’s the tax treatment, explains The Australian. Unlike regular savings or investments, the money inside your super fund is taxed at just 15%, with capital gains dropping to 10% if assets are held for more than a year.
And here’s where it gets even better: once you retire and move to an account-based pension, all your earnings, gains, and withdrawals are completely tax-free, up to $2 million per person (or $4 million for a couple). That means millions of Australians can enjoy tax-free retirement income for life.
Even with the government’s upcoming changes to high-balance accounts, financial experts say the system remains incredibly generous. It’s why Australia’s $4.5 trillion super pool is expected to double to more than $9 trillion over the next 15 years, according to the Association of Superannuation Funds of Australia.
How Savers Can Still Win
Super’s flexibility also deserves more credit. Australians can now contribute up to $30,000 a year in tax-deductible payments (called concessional contributions), plus up to $120,000 a year from after-tax savings. Those limits might sound technical, but they create a powerful opportunity.
By timing their contributions across two financial years, a couple could add over $1 million to their combined super in just one month — all within the rules. Financial planners say strategies like these will become increasingly common as more Australians near retirement and look to lock in tax-free income streams.
The Long Game Still Wins
Of course, markets go up and down, and governments can’t seem to resist tinkering with super rules. But the system itself — flawed, complicated, sometimes frustrating — remains unmatched for long-term wealth building. For most Australians, super is still the simplest and safest way to turn hard work into lasting financial freedom.
After a year of drama and doubt, maybe the real lesson is this: don’t panic, stay invested, and remember why super was created in the first place — to make sure your money works just as hard as you do.
