For Australians approaching retirement, one big question looms: should you stay with your existing super fund, structures, and strategy, or explore alternatives?
Most assume their existing super fund will take care of everything, and for many, that’s exactly what happens. They leave their money where it is.
But is that the best strategy for dependable income and risk-adjusted returns in retirement? Evidence suggests it may not be.
The status quo: most stay put
Research shows that most retirees keep their savings with their existing super provider and product mix rather than exploring alternatives.
This inertia is driven by convenience, comfort and a lack of awareness of other options. The findings also suggest a lack of adviser relationship and independent financial advice through the critical transition phase.
The Household, Income and Labour Dynamics in Australia (HILDA) survey, a major, long-term national study that tracks the life circumstances of thousands of Australians over time, and Australian Prudential regulatory Authority (APRA) data confirm engagement with super members is low: with many remaining in accumulation phase longer than necessary, and even when they move to pension phase, they rarely diversify beyond their fund.
Why that’s a problem
Concentration risk: staying with one provider means relying on a single investment philosophy and product set.
Limited innovation: APRA’s Retirement Income Covenant review highlights that many funds are still playing catch-up on decumulation strategies, with regulators urging improvement.
Performance gap: according to the SMSF Association, self-managed funds consistently outperform APRA-regulated funds over five-year periods, delivering 0.3%-1.3% higher annualised returns, a meaningful difference over a 20-year retirement.
The case for alternatives
Private credit and real assets offer stable, low-volatility income streams that complement traditional super options. La Trobe Financial’s own track record, of portfolio investments providing decades of low volatility returns for investors, demonstrates how disciplined credit strategies can deliver resilience across market cycles.
These strategies are designed for income and low volatility, with granular diversification and conservative risk management, features often missing in growth-oriented super portfolios.
Super funds are outsourcing too
The industry knows it can’t do it alone. Under the Retirement Income Covenant, super funds are increasingly partnering with external managers to deliver dependable income solutions. APRA and ASIC have flagged this trend as essential for improving member outcomes.
This trend is blurring lines between traditional super and specialist asset managers and validates the role of external expertise in retirement income.
Sequencing risk and tax efficiency
Sequencing risk refers to the danger that the order and timing of investment returns can negatively impact retirement outcomes. This is heightened during the transition phase when you start drawing income from your portfolio.
Transition-to-retirement strategies can help manage sequencing risk and optimise tax outcomes, but they work best when combined with diversified income sources, not just a single super fund.
When transitioning into retirement, it’s not the time to set and forget. For investors seeking better risk-adjusted returns, durable income and resilience, considering alternatives, like private credit and real assets, alongside super is no longer optional. It’s essential.
Explore how La Trobe Financial’s income strategies can complement your super and deliver dependable returns in retirement. Call the La Trobe Financial team on 1800 818 818 or visit latrobefinancial.com.au.
Past performance is not a reliable indicator of future performance. Withdrawal rights are subject to liquidity and may be delayed or suspended.
La Trobe Financial Asset Management Limited ACN 007 332 363 Australian Financial Services Licence No. 222213 Australian Financial Services Licence No. 222213 is the responsible entity of the La Trobe Australian Credit Fund ARSN 088 178 321. It is important that you consider the Product Disclosure Statement (PDS) before deciding whether to invest or continue to invest in any of the funds. The PDSs and Target Market Determinations are available on La Trobe Financial’s website. Any Financial product advice is general only and has been prepared without considering your objectives, financial situation or needs. You should, before investing or continuing to invest in the La Trobe Australian Credit Fund, consider the appropriateness of the advice having regard to your objectives, financial situation or needs and consider the PDS for the fund.
