Australia’s $4.2 trillion superannuation industry is widely recognised as a model for accumulating retirement savings. It is a strong example of a privately run system serving a public good, and key features are being studied by the U.S. and other nations to strengthen their own retirement systems.
While the focus has long been on growing super savings, too little attention has been paid to how those savings will support Australians in retirement.
No two people are the same and no two retirements are the same. Yet in large parts of the system today, super is still treated as one-size-fits-all. It’s a commodity that places many Australians into default investment options that are static and fail to account for individual needs and what’s required to sustain a great life after work. At a time when so much in our lives can be personalised, from our playlists to our running shoes, shouldn’t we expect the same of our retirement plans?
There is a better way. If superannuation funds made three key changes, more Australians could move from simply saving for retirement to thriving in it:
First, adopt age-based investment strategies. This is the simplest and most impactful place to start. Yet today, less than one-third of the MySuper accounts in Australia are invested in this way. Russell Investments’ research shows that if all super funds had implemented suitable age-based investment strategies five years ago, Australians with MySuper accounts would be $46 billion better off – an average uplift of 6.6% per person.
Second, go beyond age to tailor investments to individuals’ circumstances. Investment strategies should consider the amount of super saved, retirement timing, contribution rates and assets held outside super. Today most Australians are still placed in default portfolios that overlook these inputs. Without more personalisation of their super, they risk falling into two traps come retirement: some may run out of money too early, while others may be overly cautious and miss out on the lifestyle they worked hard to afford.
Third, use technology to make it easy for people to set retirement goals, track progress and adjust along the way. Planning for retirement shouldn’t begin in the final few years of work. Just setting a goal and managing to it can enhance outcomes. This is an area where technology can be a powerful differentiator. Most Australians are familiar with technology that helps track fitness, spending or habit formation, and retirement planning should be no different.
Russell Investments was one of the first in Australia to bring digital planning tools to superannuation, enabling fund members to assess how their projected retirement income aligns with their retirement goals. Data shows this approach is working. More than half of the members that set a retirement income goal are on track or ahead of their target -- a 43% increase since 2020.
This goal-based feedback becomes a far more useful guidepost than an account balance, especially during periods of market volatility. It helps inform the actions to take (or avoid) to stay on track, including how to invest , how much to contribute, and when they might retire. For example, two people may be the same age and close to retirement but require very different strategies. One who is on track might benefit from reducing investment risk to protect their savings. Another who is tracking behind may need to increase contributions, take on more risk, or delay retirement to close the gap.
Personalising super through age-appropriate investing, individualised strategies, and goal-based guidance can help improve outcomes and close the retirement savings gap. It gives more Australians, not just those with access to a financial adviser, the ability to align their super with the life they want after work.
If more super funds embrace these changes, Australia won’t just maintain its position as a global leader in retirement savings. It will help define the future of retirement security.
Media enquiries
Darren Snyder
darren@honner.com.au
0434 827 650
About Russell Investments
Russell Investments is a leading global investment solutions partner providing a wide range of investment capabilities to institutional investors, financial intermediaries, and individual investors around the world. Since 1936, Russell Investments has been building a legacy of continuous innovation to deliver exceptional value to clients, working every day to improve people’s financial security. The firm has US$332 billion (AUD $533 billion) in assets under management (as of 31/03/2025) for clients in 30 countries. Headquartered in Seattle, Washington, Russell Investments has offices in 17 cities around the world.
Russell Investments' ownership is composed of a majority stake held by funds managed by TA Associates Management, L.P., with a significant minority stake held by funds managed by Reverence Capital Partners, L.P. Certain of Russell Investments' employees and Hamilton Lane Advisors, LLC also hold minority, non-controlling, ownership stakes.
Important information
Issued by Russell Investment Management Ltd ABN 53 068 338 974, AFSL 247185 (RIM). This document provides general information only and has not been prepared having regard to your objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation or needs. This information has been compiled from sources considered to be reliable, but is not guaranteed.
To the extent permitted by law, no liability is accepted for any loss or damage as a result of reliance on this information. This material does not constitute professional advice or opinion and is not intended to be used as the basis for making an investment decision.
This work is copyright 2025. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced by any process, nor may any other exclusive right be exercised, without the permission of Russell Investment Management Ltd.