About a third (31%) of self-managed super fund members will be adversely affected by the impending superannuation reforms - not 4% the government grossly underestimated in last year's budget.
A new report from SMSF software company Class found Baby Boomers aged 49 and over will be the hardest hit as they make on average $34,100 in annual concessional contributions, which already breaches the $25,000 cap the government is imposing on 1 July 2017.
Baby Boomers and Gen X employees with SMSFs have to put the brakes on retirement savings by the new, lower cap on concessional contributions, with 25.9% aged 49 and over more likely to be affected, Class' report said.
"For a significant percentage of SMSF members, the super reforms legislated in 2016 could throw a hefty spanner into their contributions strategy and overall wealth plan," the firm said.
The report rejects the government figure that less than 1% of super account holders have a total balance of more than $1.6 million.
Class found 9.9% of SMSF members have balances more than $1.6m. An additional 1.6% of members aged under 65 have balances between $1.4 and $1.6 million and will therefore have their bring-forward contribution caps cut back under the new rules.
There will be a lot of people "nervously discussing with their accountant or financial planner" how to best structure their super and other investments to mitigate the impact of the government's changes.
"This is particularly the case for members who need to make catch-up contributions because they are older and have not enjoyed a lifetime of compulsory super or have had significant periods out of the workforce," Class said.
The latter group is disproportionately women, who on average retire with 47% less super than men, the report said.