Why Your Superannuation May Be Underperforming—and What You Can Do About It

Superannuation is one of your most significant assets, yet many Australians don’t pay enough attention to how it’s performing. If your super isn’t growing as expected, you might feel frustrated or even worried about your financial future. Let’s explore some common reasons for underperformance and the steps you can take to turn things around.

1. High Fees Eating Into Your Returns

Some super funds charge high management and investment fees that can significantly reduce your balance over time. Even small differences in fees can add up to tens of thousands of dollars by retirement.

What You Can Do:
Review your fund’s fee structure and compare it to others. Look for funds with competitive fees that still offer strong performance.

2. Poor Investment Choices

Super funds often allow you to choose how your money is invested—such as in conservative, balanced, or growth portfolios. If your investments aren’t aligned with your goals, you may not be seeing the returns you could achieve.

What You Can Do:
Consider your risk tolerance and the time left until retirement. Younger investors might benefit from higher-growth portfolios, while those closer to retirement may prefer lower-risk options.

3. Lack of Engagement with Your Super

Many Australians set up a super account when they start their first job and never look at it again. This “set-and-forget” approach can lead to missed opportunities for better growth.

What You Can Do:
Take an active interest in your super. Regularly review your statements, consolidate multiple accounts, and ensure your personal details are up to date.

4. Being in a Default Fund

If you haven’t chosen a specific super fund, your employer likely placed you in their default fund. While these funds are regulated, they may not always be the best fit for your needs.

What You Can Do:
Research and compare different funds to see if another option better aligns with your financial goals.

5. Economic Factors and Market Conditions

Sometimes, super funds underperform due to broader economic issues, such as a downturn in financial markets. While you can’t control the economy, you can manage how your super is invested.

What You Can Do:
Diversify your investments to reduce risk. Speak with a financial advisor to ensure your portfolio is balanced and resilient during market fluctuations.

Take Action Today

Your superannuation plays a crucial role in your retirement. Don’t let it underperform and jeopardize your future. By staying engaged, reviewing your fund’s performance, and making informed decisions, you can maximize your super’s potential.

If you’re not sure where to start, Redwood Financial Planning offers a complimentary superannuation review. Our team will assess your current fund, provide tailored advice, and help ensure your super is working for you—not against you.

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute financial, tax, or investment advice. We recommend speaking with a qualified financial adviser before making any decisions regarding your superannuation. Every individual’s financial situation is unique, and personalised advice is essential to ensure the best outcome for your specific circumstances.