Three ways to check your super is working for you

By Vanguard

Super and retirement

Small changes in performance or fees can make a big difference in retirement.

How often do you check in with your super? For younger Australians, the answer is likely to be “not very often”.

Research by ASIC’s Moneysmart found that three in 10 millennials (aged 29 to 44) check their super fund’s performance less than once a year or not at all.

There’s a simple reason why it’s a good idea to check in more regularly: small changes in performance or fees can make a big difference in retirement.

The Productivity Commission estimates that paying an additional 0.5 percentage points in annual fees (for example 1.5% rather than 1%) could cost a typical full-time worker around 12% of their balance by the time they reach retirement. That works out to be about $100,000.

Here are three ways to check your hard-earned super is working hard for you.

Step 1: Check your super fund’s fees

Unfortunately, super fees can be confusing. Super funds can charge administration fees, investment fees, performance fees, insurance premiums and other charges.

To make things worse, there are inconsistencies around how fees are disclosed, which is why Vanguard is calling for greater transparency around fees in superannuation.

A good place to start is your annual super statement, which includes details about your fund’s fees and investment performance. Often, you can access a digital copy via your super fund’s website or online portal.

You can use these numbers to compare your fund to others on the market, but it’s important to make like-for-like comparisons.

Importantly, fees should be considered in the context of your fund’s performance and investment profile. For instance, if you are invested in a balanced option, compare your fees to those of balanced options from other funds.

Super funds should have information about fees and performance on their websites and in product disclosure statements.

You can also use the ATO’s YourSuper comparison tool to compare funds. However, keep in mind the tool only compares basic superannuation products (known as MySuper).

There are also commercial websites that will allow you to compare funds, but keep in mind these services may not include all available options.

Finally, it’s important to consider fees and performance over a reasonable time frame. ASIC’s Moneysmart suggests five years at a minimum.

Step 2: Check how your super is invested

Besides fees, it’s also important to ensure that your super fund is investing in a mix of assets that is appropriate for your situation.

Historically, most Australians have had their super invested in balanced funds by default, which typically hold around 50–70% in growth assets (like shares and property) and 30–50% in defensive assets (like bonds and cash).

If you are early in your career, and have decades until retirement, you might be willing to take on additional risk by investing in a more aggressive growth option, which could offer higher returns over the long-term.

Meanwhile, if you are closer to retirement, you might prefer to take a more conservative approach to minimise the risk of losses in the event of a market downturn.

Most super funds have information about the target asset allocations of each of their investment options available on their website.

When considering different investment options, ASIC’s Moneysmart suggests considering:

Your age;
How comfortable you are with investment risk; and
How long before you will be able to access your funds.

Step 3: Check for lost super and consolidate accounts

If you have multiple super accounts, you could be paying multiple sets of fees and insurance premiums, which could significantly impact your balance by the time you retire.

Thankfully, it’s now easy to consolidate super funds through the ATO’s online service in myGov.

Once you have logged in to the ATO’s service, select ‘Super’ from the top menu. Then, you should see a list of super accounts. If you have multiple accounts, you can submit a transfer request directly through myGov.

The ATO also has an automated super search phone line, which you can use by calling 13 28 65.

As of 30 June, 2024, the ATO held just under $17.8 billion of lost super from over 7.1 million accounts.

Some of that money could belong to you, your friends and your family, so it’s worth spending the few minutes it takes to check.

By being more engaged with super, you can make sure it’s working as hard as it should. To learn more, visit the educational resources on the Vanguard Super website.

^{General advice warning}

^{Vanguard is the product issuer and the Operator of Vanguard Personal Investor. Vanguard Super Pty Ltd (ABN 73 643 614 386 / AFS Licence 526270 is the trustee of Vanguard Super (ABN 27 923 449 966) and the issuer of Vanguard Super products. We have not taken your objectives, financial situation or needs into account when preparing this report so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs and the disclosure documents of any relevant Vanguard financial product before making any investment decision. Before you make any financial decision regarding a Vanguard financial product, you should seek professional advice from a suitably qualified adviser. A copy of the Target Market Determinations (TMD) for Vanguard’s financial products can be obtained at vanguard.com.au free of charge and include a description of who the financial product is appropriate for. You should refer to the TMD of a Vanguard financial product before making any investment decisions. You can access our IDPS Guide, Product Disclosure Statements, Prospectus and TMD at vanguard.com. au or by calling 1300 655 101. Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. This report was prepared in good faith and we accept no liability for any errors or omissions.}