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Highlights
- Default super funds may limit long-term growth
- Age-aligned strategies show higher retirement outcomes
- Average accounts could have gained an extra $3,200
For millions of Australians, default superannuation funds might not be delivering the best possible returns. Recent insights suggest that a shift towards age-aligned investing strategies could have significantly boosted retirement savings.
A comparative study analyzing the performance of age-based lifecycle strategies versus traditional default MySuper options revealed that Australians using personalised, age-targeted investments could have seen an uplift of around 6.6% in their retirement savings over the five years to March 2025. This translates into an average boost of $3,200 per account for the 14.5 million default MySuper account holders.
The key issue lies in how default super funds operate. These one-size-fits-all options are built to accommodate everyone from young adults entering the workforce to individuals on the cusp of retirement. As a result, these funds tend to adopt a conservative approach, often with heavier allocations in bonds and cash, and limited exposure to growth-oriented asset classes like Australian and international equities — including top ASX200 stocks.
On the other hand, lifecycle or age-based superannuation options automatically adjust investment risk based on the account holder’s age, potentially offering more aggressive exposure to equities like those within the ASX200 during early career stages and reducing risk closer to retirement. This personalised strategy aligns investments with life stages and can improve long-term outcomes.
The data comes from a detailed performance review conducted using Chant West benchmarks, which compared outcomes of Russell Investments’ GoalTracker lifecycle solution — part of its MySuper strategy — with industry-wide MySuper performance. Though Russell Investments manages $12 billion in assets and operates independently, the broader takeaway applies to the entire superannuation industry.
Further supporting this approach, lifecycle options have consistently outperformed single-strategy default funds across multiple periods. Over the past three years to March 2025, several lifecycle super options, such as those from Virgin Money (ASX:VUK), TelstraSuper, and Aware Super (ASX:IOF), were among the top-performing MySuper funds.
Personalisation doesn’t have to stop at age. Once members actively engage with their super, they can integrate specific retirement goals and adjust for individual risk preferences. This allows for even more effective retirement planning, particularly as more Australians look to maximise their returns from ASX200-aligned investments and beyond.
