What is the new $3 m super tax?

The new "$3 million super tax," officially Division 296, is an Australian government proposal to introduce an additional tax on investment earnings for superannuation balances exceeding $3 million, effective July 1, 2026, with revised rules including indexation and taxing only realized gains, creating tiers with higher rates (up to 30% total) for balances over $3m, and even higher (up to 40%) for balances over $10m. The original plan for an unindexed 15% tax on all earnings above $3m, including unrealized gains, was modified after industry feedback.

What are the super changes from 1 July 2025?

What's changing? On 1 July 2025, the Super Guarantee rate will increase from 11.5% to 12% of your before-tax earnings.

What is the new capital gains tax on super?

Capital gains in super currently receive a discounted tax rate of 10 per cent, versus the planned higher discounted capital gains rates of between 20 per cent and 27 per cent for high-balance accounts under the new regime starting July 1, 2026.

What is the proposed $3 million super tax?

The new $3 million super tax is a proposed tax change that will impose an additional 15% tax on investment earnings, including unrealised gains, for super balances exceeding $3 million. This would bring the total tax rate on these earnings to 30%.

Is it still worth contributing to superannuation once I hit $3m?

That said, despite any proposed changes that may occur, superannuation remains a tax-effective retirement savings vehicle for the vast majority of Australians. Even at up to 30 per cent tax above $3 million, it is usually better than investing personally.

6 Things You Should Know About The New $3m Super Tax (Division 296 Tax)

What percentage of people have 3 million in retirement?

If you have $3 million in retirement savings, you are among a tiny percentage of American households with a nest egg that large. When calculating what percentage of retirees have $3 million, the Employee Benefits Research Institute (EBRI) analysis found that just 0.8% of households have saved $3 million in retirement.

Should I take a $44,000 lump sum or keep a $423 monthly pension?

Choosing between a $44,000 lump sum and a $423 monthly pension depends on your health, financial goals, investment skills, and other income; a lump sum offers flexibility and inheritance potential but carries investment risk, while monthly payments provide guaranteed income for life, ideal for covering essential expenses and avoiding market volatility, but potentially less flexible and can't be inherited unless you choose a survivor option, so consider if you need steady cash flow versus control and growth, and consult a financial advisor. 

How many people have over $3 million in super?

Around 1.4 per cent or 142,000 households have more than $3 million in superannuation. Our specific interest in this paper is individuals who have more than $3 million in superannuation. We found only 87,000 individuals with more than $3 million balances.

At what age can I withdraw my super without paying tax?

If you're aged 60 or over and withdraw a lump sum: You don't pay any tax when you withdraw from a taxed super fund.

How many Australians have $1,000,000 in superannuation?

In the organisation's super balance update, it found 2.5 per cent of the population have a super account of more than $1 million, as of June 2021. This represents 417,567 individuals, ASFA said, and is a 29 per cent increase from the 322,200 individuals who held over $1 million in June 2019.

Who qualifies for 0% capital gains?

To qualify for 0% federal capital gains tax, you must have long-term capital gains (assets held over a year) and your taxable income must fall below specific IRS thresholds, such as under $48,350 for single filers or $96,700 for married couples filing jointly in 2025, with higher amounts possible by using deductions to lower your overall income. This strategy is often used in retirement when income is lower, allowing significant gains to be tax-free. 

Can I put money into super to avoid capital gains tax?

Making deductible contributions to super can help to reduce tax on capital gains in the right circumstances. If you're using this strategy, it is important to keep an eye on your concessional contribution cap and remember that contributions are invested for your retirement.

Is $700000 in super enough to retire in Australia?

Yes — a couple can retire on $700,000 in Australia, particularly if they own their home and are eligible for Age Pension support later in retirement. Retiring at 65 with this balance could mean an annual income closer to or above the ASFA 'comfortable' standard for couples.

Can I withdraw my super at 65 and keep working?

You can access your super: From age 60: If you're retired or leave a job. You can also open a Transition to Retirement account to access some of your super while you're still working. From age 65: Whether you're still working or not.

Is super going to 12%?

From 1 July 2025, the SG rate is 12% of your employee's ordinary time earnings. You might need to pay a higher SG rate if it's in an award or enterprise agreement. Super contributions are paid in addition to your employee's wages or salary. Employees can ask you to make extra post-tax super payments for them.

Can I retire at 60 with $500,000 in super?

Retiring at 60 with $500,000 in super is possible but challenging, depending heavily on your spending, lifestyle, and if you qualify for the Australian Age Pension. You might cover modest expenses using strategies like drawing down around $20,000 annually (using the 4% rule as a guide) plus other income, but it requires careful budgeting, potentially part-time work, and reducing living costs. A financial advisor can help tailor a plan, as $500k alone usually supports a basic to moderate retirement, not a lavish one. 

What is a good monthly retirement income?

A good monthly retirement income is generally 70-80% of your pre-retirement income, aiming to maintain your lifestyle, but it varies greatly by location, healthcare needs, and spending habits; for many, this translates to $4,000 to $8,000+ monthly, covering basics to a comfortable life, with averages around $5,000/month for individuals and $8,300/month for couples, though median figures are lower, highlighting the importance of personal budgeting. 

What are the biggest retirement mistakes?

• Top Ten Financial Mistakes After Retirement.
• 1) Not Changing Lifestyle After Retirement.
• 2) Failing to Move to More Conservative Investments.
• 3) Applying for Social Security Too Early.
• 4) Spending Too Much Money Too Soon.
• 5) Failure To Be Aware Of Frauds and Scams.
• 6) Cashing Out Pension Too Soon.

How many retirees have $3 million?

95% of Americans have less than $3 million saved, putting you squarely in the top percentiles of retirees. To determine how much you need to retire, you need to project your desired lifestyle (and its associated costs) into the future.

How many people have $1,000,000 in retirement savings?

Only a small percentage of Americans have $1 million in retirement savings, with estimates ranging from around 2% to 5% of all households, though the number of accounts with over $1 million is growing, with some reports showing nearly a million 401(k) millionaires and over 1.9 million total retirement accounts (401k/IRA) over $1M as of late 2025. The majority fall short, with average savings often below $1 million even for older age groups, highlighting the challenge of reaching that goal. 

How many Americans have $500,000 in retirement savings?

Roughly 7% to 9% of American households have $500,000 or more in retirement savings, though figures vary slightly by source, with data from late 2025 suggesting around 7.2%, while another study showed about 9% of households with savings in that range. A significant portion of Americans lack substantial savings, with nearly 60% having under $10,000, while numbers increase with age, showing that for older adults (60s), median savings approach $500k, but overall, less than 10% reach that milestone. 

What is the smartest thing to do with a lump sum of money?

The best thing to do with a lump sum involves a prioritized plan: first, pay off high-interest debt, then build a solid emergency fund, and finally, save and invest for long-term goals like retirement, potentially using methods like dollar-cost averaging if you're nervous about investing all at once. Also consider saving for specific short-term goals, making wise investments like home improvements, and allocating a small portion for a well-deserved treat. 

How much does Dave Ramsey say you should invest in retirement?

Invest 15% of Your Income

Ramsey suggested investing 15% of your gross income in good mutual funds, something you can do through tax-advantaged retirement accounts like an IRA or 401(k).