New sector analysis has revealed SMSFs are the leading retirement savings vehicle assisting individuals in moving from accumulation phase to drawing down income.
To this end, the data drawn from ATO statistical reports and compiled by financial planning principal James Hayes, showed SMSFs now pay out significantly more in benefits than they receive in contributions.
The figures acknowledged SMSFs paid $57.7 billion in retirement benefits during the 2024 financial year, compared with $26.2 billion in contributions. This represents a benefit-to-contribution ratio of about 2.2 to 1.
The result indicates the sector is now a net payer, with total outflows of $80.4 billion exceeding inflows of $46.5 billion.
The study suggested demographics likely play a role in this trend, with more than half of all SMSF members having already achieved retirement age. Specifically, 50.8 per cent of members have crossed this threshold, with 16.7 per cent aged 75 or older.
The report also found liquidity and access to cash are a priority, reflected in the fact almost half of all sector assets are currently held in listed shares and cash or term deposits. It concluded this indicates flexibility has become a priority as members look more towards drawing an income from their fund.
A further finding was that retirement planning is happening long before individuals intend to cease their gainful employment.
“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,” Hayes noted.
“When SMSFs are paying out more than twice what they receive in contributions, it’s a clear sign they’ve moved into retirement mode.”
He argued the primary objective for these funds is no longer solely accumulation.
“These funds are no longer about accumulation – they’re paying people an income,” he pointed out.
