Super for Australia · PUBLISHED 29 AUG 2026 · VERIFIED 29 AUG 2026 · AU EDITION

ALEX EXPLAINS: Your Super Default Option Could Cost You $148,000

▶

A typical worker stuck in a higher-fee default super option can lose tens of thousands of dollars over a career, and one comparison of large funds found fee gaps as high as $3,378 a year on a $300,000 balance between a default option and a similar index option.

The number that matters

The central number is $148,000: that is the video’s headline estimate for the lifetime cost of staying in the wrong default super option, and it should be presented as an illustrative modeled figure rather than a universal guarantee because the exact outcome depends on fees, returns, salary growth, and contribution history.

How it quietly costs you

The first hidden cost is higher ongoing fees in the default option, because super funds can charge administration, investment, switching, insurance, and other fees that compound over decades. Consumer-facing comparisons show that the difference between a default option and a comparable lower-fee alternative can be large: one industry comparison found gaps of $2,062 vs $592 for AustralianSuper, $2,482 vs $682 for Aware Super, and $3,378 vs $168 for Hostplus on a $300,000 balance. Moneysmart’s calculator assumes $59 a year plus 0.08% of balance for administration fees as a default modelling assumption, which is useful as a benchmark for estimating long-run drag. Old vs better: the old habit is “stay in the default”; the better comparison is to check whether a lower-fee indexed or comparable option is materially cheaper for the same risk profile.

The second, compounding trap

The second layer is performance drag from being in the wrong investment mix, because default options are not automatically the best-performing or lowest-cost choice for every member, and Moneysmart explicitly tells Australians to compare performance over the past 5 years as well as fees. Australian Retirement Trust says its lifecycle default is designed to shift from growth toward protection as retirement approaches, which means the default can change over time and may not match an individual’s preferred risk/return profile. The long-run cost is that a member can pay more in fees and compound from a lower net return; this is why fee comparisons alone understate the true lifetime penalty. A concrete benchmark for “better” is to compare the default against another option with a similar asset allocation but lower fees, rather than comparing only headline returns.

What this looks like in practice

Emma, 32, retail operations manager, earns $78,000, has $54,000 in super, is in a default MySuper account, and expects about 35 years to retirement. She would likely discover:

• Her default super choice may be costing her hundreds to thousands of dollars a year in fees compared with a similar lower-cost option, based on the fund comparisons showing gaps up to $3,378 a year on a $300,000 balance.
• Moneysmart’s default modelling assumption already bakes in $59 + 0.08% p.a. in administration fees, so even “normal” fee settings compound materially over time.
• If her balance grows into the six-figure range, a seemingly small percentage gap becomes a large dollar gap; the fund comparison examples show default-versus-alternative gaps of roughly $1,470 to $3,210 a year in the cited cases.

The full cost of doing nothing

For Emma, the combined lifetime cost of higher fees plus performance drag can plausibly approach the video’s headline $148,000 figure if she remains in an expensive default option for decades and if the fee/return differential stays similar to the modeled assumptions. That number should be framed as a modelled estimate, not a promise, because the actual result depends on contribution rates, wage growth, market returns, and whether she switches early.

What to do about it

• Compare your super against alternatives using the Moneysmart super fund comparison / choosing a super fund guidance and check the last 5-year performance plus all fee lines.

• Open the Moneysmart super fund comparison guidance.

• Check the fund’s 5-year performance figure and all listed fee categories.

• Compare your default option against one lower-fee, similar-risk alternative.

• Good looks like: materially lower total fees with no unacceptable drop in long-term performance.

• Check your account details in myGov → ATO → Super → Manage to see all super accounts and whether you have unwanted defaults or duplicates.

• Log in to myGov and link the ATO if needed.

• Open Super and select Manage.

• Review linked accounts and transfer unwanted balances where appropriate.

• Good looks like: one active account, no forgotten small accounts, and no money trapped in an expensive default.

• Use the ATO / Moneysmart super calculator to model the dollar gap from fees over your working life.

• Enter your current balance, contributions, and retirement age.

• Compare the default fee assumption with a lower-fee alternative.

• Note the difference in projected retirement balance.

• Good looks like: the projected retirement balance is higher by enough to justify switching, with the fee gap clearly visible in dollars.

A myth worth clearing up

Myth: “My default super is fine because all default options are basically the same.” Fact: Default options can differ sharply in both fees and outcomes, and Moneysmart says Australians should compare performance, fees, insurance, and services rather than assume the default is best.

Sources

• Moneysmart
• Moneysmart
• ATO

Researched 2026-08-29.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.