Age-based super strategies could add thousands to retirement savings

Australians in default investment options could collectively be $46 billion better off with age-based personalised strategies, according to analysis from Russell Investments.

Russell Investments, the operator of the Russell Investments Master Trust, which manages $12 billion in assets and serves over 80,000 members across various super offerings, estimated this would translate to an average uplift of $3200 per MySuper account holder.

Russell compared the performance of its age-based MySuper solution, GoalTracker, to the superannuation industry's MySuper options, using Chant West data, over the five years to March 2025.

It calculated that 14.5 million MySuper accounts would've achieved an average retirement savings uplift of 6.6% over the period if their investments had been aligned to their age.

Russell Investments head of Asia Pacific Jason Edgar said many Australians are stuck in one-size-fits-all investments that fail to meet their individual needs.

"We now have the track record to prove that personalising super through age-based investing and individualised strategies improves retirement outcomes," he said.

However, while age is a "valuable starting point," meaningful personalisation goes further, Russell Investments said.

The firm said helping individuals set a clear retirement income goal provides the foundation for "stronger engagement and smarter decisions" around contributions, investments, and retirement timing.

It added that super funds have a powerful role to play in improving long-term outcomes, whether by supporting better contribution habits or managing investment risk dynamically.

While age-based personalised strategies incorporate financial goals and risk tolerance, lifecycle investing follows a more passive approach, adjusting allocations based on age.

Despite the difference, it's notable that the median default lifecycle investment option has consistently outperformed the median default single-strategy investment option across one-, three-, five-, and 10-year periods, according to Rainmaker Information.

Over the past three years to March 31, six default lifecycle investment options from Colonial First State, Team Super, Virgin Money, TelstraSuper, and Aware Super, ranked among the top 10 performing MySuper options.