Simple Trick to Add $1.5m in Super for Young Aussies

By the Editorial Team · Sunday, July 5, 2026

AMP Super's analysis shows that a 1 percentage point increase in annual superannuation fund returns can boost a 20-year-old's retirement savings by about $750,000, growing to an additional $1.5 million when factoring in post-retirement withdrawals. This highlights the critical importance of selecting higher-performing funds early and maintaining a strong equity allocation to significantly enhance retirement income.

Younger Australians could significantly increase their retirement savings by selecting superannuation funds with slightly higher returns, according to recent analysis by AMP Super. The study highlights how a modest 1 percentage point increase in annual fund performance can translate into substantial gains over a full working lifetime.

The modelling uses the example of a 20-year-old earning $45,000 per year, contributing $5,400 annually to their superannuation account. Assuming wage growth of 3.5 percent annually, and an average fund return of 6 percent per year, the individual would accumulate approximately $2.4 million by retirement at age 67. However, if the annual return improves by just 1 percentage point to 7 percent, the total retirement savings could reach $3.15 million—a difference of around $750,000 in nominal terms.

When adjusted for continued investment and withdrawals until age 95, the additional 1 percent growth could add approximately $1.5 million more to retirement savings. This translates to an increase in monthly retirement income from about $4,650 to $6,050, or roughly an extra $400 per week.

Anna Shelley, AMP’s Chief Investment Officer, emphasized the importance of choosing a high-performing superannuation fund early in one’s career. “While a 1 percent difference might seem small, over a long period, compounding can result in significant gains,” Shelley said. She also recommended that younger investors maintain a high allocation to equities, generally around 70 percent, as this is typically associated with higher growth potential.

Guidance from the Association of Superannuation Funds of Australia (ASFA) indicates that a comfortable retirement requires a single individual to have around $630,000 at retirement age, while couples need approximately $730,000. Super Consumers Australia (SCA) provides additional figures, stating that a typical single retiree will require $322,000 in superannuation savings to retire, but those who rent their homes need much more—around $659,000—to cover basic living costs, which is more than double the amount needed by homeowners.

These findings reinforce the impact of fund performance on retirement outcomes and underline the need for younger workers to actively manage their superannuation choices to maximize long-term growth.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.