The simple $174,000 question many retirees still get wrong

August 8, 2026 — 5:02am

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I got asked a simple question on social media this week, one that most people in the retirement and superannuation industry think people already know the answer to. But to my surprise, it sparked an enormous conversation.

The question was “If I’m retired why wouldn’t I just take all my money out of super and put it in the bank?” Apparently, many people are unaware of the benefits of keeping their money in super, and don’t know about the really juicy upside of moving your superannuation into a retirement phase account so you can enjoy tax-free income when you’re retired.

So today we’re going back to basics – to what actually happens to your money the day you retire and why that decision, more than almost any other that you’ll make determines how far your retirement savings might stretch.

While you’re working, your super sits in what’s called the accumulation phase. Most people reach retirement today with a reasonable or even large balance in their accumulation phase account, unable to access it until they meet two key conditions: reaching the official superannuation access age of 60, and ceasing just one job/employment relationship (even if they go back to work elsewhere afterwards) or, or simply turning 65 at which point you can access your super unconditionally, whether you’re working or not.

During your working phase of your life, you contribute to your superannuation account chiefly from your employer contributions, which are taxed at up to 15 per cent on the way in up to the concessional contribution cap of $32,500.

And once the money is inside super investment earnings are taxed at 15 per cent and capital gains at up to 10 per cent because superannuation still gets a one-third discount on assets held longer than 12 months.

Why on earth does the bank feel more compelling? I think it comes down to familiarity.

But from the day you retire........

© The Sydney Morning Herald