Super

Superannuation: The $500k Mistake Most Aussies Make

Your super fund is quietly eating your retirement. Here's how to stop the bleeding.

Published by NoBS Finance · 5 July 2026 · 6 min read

Key Takeaways

A 1% difference in super fees compounded over 30 years can cost hundreds of thousands of dollars in lost retirement savings.
Many major funds offer low-cost indexed investment options that charge significantly less than default options.
Check your fees on myGov or your fund's annual statement. If the total is over 0.6%, compare indexed alternatives within your fund.
Consolidating multiple super accounts into one eliminates duplicate fees.
Government co-contribution can add up to $500 for eligible low and middle income earners, but thresholds change annually.

Super: Your Silent Wealth Killer

Most Australians will have more money in super than anywhere else. And many are paying 1% to 2% too much in fees. Over 40 years, that can add up to hundreds of thousands of dollars. Here is how to check whether you are one of them.

The Fee Trap

A 1.5% fee versus a 0.5% fee sounds small. On a $400,000 balance earning 7% per year over 30 years, the difference is enormous.

Hypothetical example: You have a $400,000 super balance earning 7% average return. You compare two investment options within the same fund.

Fee option	Balance at retirement (30 years)
1.5% annual fee	approximately $1.36 million
0.5% annual fee	approximately $1.89 million

Same returns, same contributions. The difference is roughly $530,000 gone to fees. This is a hypothetical example for illustration only. Actual returns will vary and past performance is not a guarantee of future results.

The math is simple: a 1% difference in fees, compounded over decades, eats a massive chunk of your final balance. The higher the fee, the more of your investment returns are swallowed before they reach you.

Check Your Fund Now

Log into your super account or check myGov
Find the "fees and costs" section in your annual statement
Look for "investment fees" plus "administration fees"
Add them together. If the total is over 0.6%, you may be overpaying

The Fix

Most major super funds now offer a low-cost indexed investment option. These options track an index rather than paying a fund manager to pick stocks. Examples include indexed options from funds like Hostplus, AustralianSuper, and others. The exact fees change over time, so check the current fees on your fund's website or the ATO's YourSuper comparison tool.

This is not a recommendation to switch to a specific fund. It is a prompt to check what you are paying and compare it to the cheapest option available within your existing fund. Same fund, same app, same insurance. Often just a cheaper investment option. It usually takes about 10 minutes to switch.

Other Super Wins

Consolidate accounts. Multiple funds means multiple sets of fees. If you have more than one super account, combine them through myGov.
Check your insurance. Default life and TPD cover can be expensive if you do not need it. Check whether the cover suits your circumstances.
Salary sacrifice. Contributing extra pre-tax into super saves on income tax and grows your retirement balance.
Government co-contribution. If you earn below a certain threshold and make after-tax contributions, the government may match up to $500. The income thresholds change each year, so check the current limits on the ATO website. Co-contribution income thresholds and maximum match amounts change annually.

The Catch

Switching investment options can trigger capital gains within the fund. This is usually not an issue for long-term holders, but check with your fund before switching. Also, cheaper is not always better. Make sure the investment option matches your risk tolerance and time horizon. A low-fee high-growth option is not right for someone close to retirement who needs stability.

The Bottom Line

Super fees are one of the few things in finance you can control. You cannot control market returns, but you can control what you pay in fees. A 1% difference compounded over 30 or 40 years is one of the largest drains on Australian retirement savings. Check your fees today.