Most of us likely take a “set and forget” approach when it comes to our superannuation, sticking with the same fund for most of our lives. But new research suggests that choice could be costing us dearly in retirement.
Finder’s latest survey of 1,014 Australians reveals that one in three (32 per cent) – equivalent to 6.8 million people – are still with the same default super fund their first employer allocated. A further 26 per cent are with their current employer’s default, while only 41 per cent have chosen a fund themselves.
Superannuation literacy expert Pascale Helyar-Moray says too many Australians are missing out by not checking whether their fund is the best option.
“While the process of switching funds can seem complex, it’s actually very simple and can significantly benefit you in the long run,” she said.
“There is a high probability that a better fund exists than the one your first employer set up for you.”
The potential difference is huge. Finder analysis shows that lifting the average annual return on a $100,000 super balance from 6 per cent to 7 per cent could mean an extra $186,876 after 30 years, excluding fees.
Helyar-Moray stresses that no matter your stage of life, it pays to keep track of how your fund is performing.
“The amount you accumulate now will determine your lifestyle in retirement, so if your fund isn’t performing well, it might be time to switch,” she explained.
“When comparing providers, always look at their one, five, and ten-year returns, as well as the fees.”
While switching super funds can pay off in the long run, there are other smart moves that can also make a big difference. Chris Brycki, Founder and CEO of Stockspot, suggests three strategies to help boost your super balance:
Keep an eye on fees – Super fees vary widely between funds, and high charges can quietly eat away at savings.
Look for growth as well as income – When choosing investments, focus not only on steady returns like dividends but also on options that grow in value over time. This balance can help protect and grow your nest egg.
With millions of Australians still tied to their first fund, the message is clear: a little effort now to review and compare your options could lead to a far more comfortable retirement.
Read more: Five simple ways you can help maximise your superannuation for a comfortable retirement
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