Keep an eye on your super

Despite the value of super balances continuing to rise, it remains fascinating to see the level of switching between providers by consumers. Typically, as markets become more uncertain we see that members are less likely to switch as they are worried about making the wrong choice.

However, for returns at December 31, 2016, 3% of balanced options had a return below inflation over the past decade, while 11% failed to return inflation plus 1%.A 1% difference in returns over 30 years could mean a 20% difference in your final retirement balance. Half of funds delivered a return of inflation plus 3% while the top provider achieved inflation plus 4.3%.

For those members in a fund that has been delivering a below-inflation return over the past decade, it means their super balance has gone backwards in real terms and this is likely to impact their retirement lifestyle or delay their retirement. Therefore, reviewing your provider’s long-term net outcomes every couple of years will allow you to see if your nest egg is on track. Kirby Rappell, research manager, SuperRatings