According to the , there were 178 Australians under the age of 30 who — despite having a taxable income range of $18,200 — held a reported superannuation balance of more than $2 million in the 2021-2022 financial year.
The anomaly raises questions about the strategies that could enable such a super balance, and the challenges the system poses for young Australians struggling with cost of living pressures and difficulty entering the property market.
So, how were these super balances possible?
Andrew Grant, associate professor of finance at the University of Sydney, has some explanations for how they may have occurred.
"You might see some people who've been particularly wealthy putting some money aside in a trust or being able to use super as a tax vehicle," he told SBS News.
"Potentially, they've been given some money and decided to put it in super for safekeeping until [they're] retired so they don't waste it. It's likely to have come from a self-managed super fund and a family trust in a lot of other circumstances," Grant said.
While these are extraordinary cases far removed from the experiences of most young Australians, they do highlight a disparity between such examples and those grappling with skyrocketing living costs and the seemingly unattainable dream of owning a home.
Struggling to own a home despite large super balances
According to Grant, mandatory superannuation contributions can feel like a financial burden for many young Australians.
"We don't want to create a situation where people are struggling to meet day-to-day living expenses while having large balances in their savings account for retirement that they can't access," Grant said.
He explained that while superannuation contributions made in one's 20s multiply significantly over time, this long-term benefit often conflicts with immediate financial needs.
Despite these tensions, accessing superannuation early for a home deposit or other investments remains a contentious issue.
"If we enabled people to access some of their superannuation early for the purpose of building a house, it wouldn't necessarily be a problem.
"But the amount they would need to have saved to make a material difference isn't likely to push the needle much in making it easier to buy a house," Grant says.
Grant also highlighted systemic inflexibility as a potential flaw in Australia's superannuation model.
He pointed to international examples, such as the United States, where early access to retirement savings is possible but comes with heavy penalties.
However, he acknowledged that such measures may not gain political or public favour in Australia.
"Part of the reason the government has such tight control over superannuation is because it's intended for retirement savings to ease the burden on the state system," he said.
"Allowing more access early could lead to people needing the age pension when they retire."
How can you quickly grow your super balance?
Dr Shumi Akhtar, associate professor at the University of Sydney Business School, says there are steps that young Australians can take to grow their superannuation quickly, including leveraging the power of compound interest — which can significantly multiply contributions over time.
"Starting early is absolutely essential," Akhtar said.
"Maximising government co-contributions, partner contributions, and low-income super tax offsets is a smart way to boost balances.
"Salary sacrificing is another effective tool. It not only reduces taxable income but also helps grow super faster."
Akhtar also highlighted the importance of "choosing funds with low fees and strong performance" and aligning investment options with individual growth goals.
"Regularly reviewing investment performance and staying within contribution caps to avoid penalties are essential practices," Akhtar said.
Most importantly, Akhtar stressed the importance of seeking professional advice.
"Avoid early withdrawals and consult a financial adviser to tailor strategies to your specific circumstances."
Superannuation for the next generation
According to Grant, the disconnect between immediate financial challenges and long-term savings goals is particularly stark for young Australians.
Grant says that social and cultural shifts, such as the rise of and the growing influence of social media, further complicate financial behaviours.
"There's a big generational shift," he said.
"It's harder to avoid certain consumption traps today than it would've been in the past. A lot of people feel like home ownership is out of reach and don't even bother trying. This is why we end up seeing a lot of people fall into short-term consumption needs."
More than 30 years after superannuation was widely introduced in Australia, could reforms help the system better align with the needs of younger Australians?
In the meantime, Grant says that finding a balance between immediate financial pressures and ensuring future security is a complex but necessary task.
"How much people need in retirement is a complex issue, but by the time you get there, it's quite likely you'll need more money than you think. If you don't get started early, you may end up being a long way behind."
