Dental Super Withdrawals Rise Amid Growing Retirement Costs

Dental super withdrawals have jumped sharply, with Australians taking $817.6 million from their retirement accounts for dental treatment in the 2024‑25 financial year.

Early access on compassionate grounds reaches new heights

Data from the tax authority, referenced by the brokerage Savvy, show that dental costs made up about 58 percent of the $1.416 billion approved for early super access on compassionate grounds. The average amount taken for a dental procedure was $24,889.

Five years earlier, the same category accounted for just $108.2 million, roughly 23 percent of total compassionate withdrawals. The rise reflects both higher treatment prices and growing pressure on households as retirement savings become a safety net for health expenses.

In the latest year, the proportion of funds directed to dental care more than doubled, indicating that the cost of oral health is becoming a significant driver of early retiree‑fund use.

Long‑term retirement balance at risk

Savvy’s modelling suggests that a 30‑year‑old who taps the average $24,889 for dental work could see their super balance shrink by $85,906 by age 67. The shortfall stems from lost investment earnings over the decades.

By contrast, financing the same expense with a five‑year personal loan would require $591 monthly payments and generate $10,598 in interest, based on a 14.95 percent average rate for medical‑purpose loans.

After adding loan costs, the analysis estimates the 30‑year‑old would be $75,308 better off at retirement than if they had accessed their super early.

For older individuals, the impact lessens but remains sizable. A 40‑year‑old would end up $61,463 behind, while a 50‑year‑old would face a $43,975 reduction compared with staying invested.

These figures are derived directly from the tax agency’s published statistics and the brokerage’s internal calculations; no additional assumptions were introduced.

Given the potential erosion of retirement savings, some observers argue that policy makers might need to revisit the compassionate‑access criteria. If dental expenses continue to climb, the current framework could unintentionally push more retirees into early fund depletion, raising concerns about future income security.

Bill Tsouvalas, managing director of Savvy, warned that Australians should treat their super as a “padlocked safe” and only break the lock in genuine emergencies. He noted that the First Home Super Saver scheme is a clear exception, but otherwise the funds should remain untouched.

“If you’re considering accessing it to cover the cost of expensive dental treatment, it should only be a ‘break glass in case of emergency’ solution if you’re unable to fund it yourself or obtain any other form of finance,” Tsouvalas said.

He also acknowledged that borrowing isn’t feasible for every household, but suggested that those who can afford an extra $150 per week might find the loan route a reasonable trade‑off for preserving tens of thousands in retirement assets.

For readers seeking more detail on superannuation, the Wikipedia entry on Australian super provides an overview of contribution rules and withdrawal conditions.