Why is my super going down?
If your superannuation balance has dropped, it does not automatically mean something is broken. In many cases, a falling balance reflects normal market movement, especially when your money is invested in a balanced fund that holds growth assets like shares and property alongside defensive assets such as bonds and cash.
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What this article covers
- Why super balances go up and down.
- How a balanced fund works.
- Why negative months or years can still be normal.
- What to review before changing your investment option.
- Common questions people ask when their super falls.
Why your super balance can fall
Your super is invested, not parked in cash. That means the value of your account moves with the value of the underlying assets held by your super fund, which can include Australian shares, international shares, property, fixed interest and cash.
When share markets are volatile, interest rates rise, or global events create uncertainty, super balances can fall in the short term. This is one of the main reasons many Australians suddenly notice a drop in their superannuation during periods of market stress.
What is a balanced fund?
Balanced fund basics
A balanced fund is designed to sit between conservative and high-growth options. It usually holds a mix of growth assets, such as shares and property, and defensive assets, such as bonds and cash.
This mix aims to deliver long-term growth while reducing some of the volatility that comes with being heavily invested in shares alone.
Why balanced funds still fall
Balanced funds are not guaranteed to rise every year. Because they still include meaningful exposure to growth assets, they can produce negative returns during weaker market periods.
That is why a balanced super option may still go backwards for a time, even though it is generally less aggressive than a growth or high-growth option.
Negative returns can be part of the journey
One of the most important ideas for superannuation investors is that returns are rarely smooth. Over a long investment timeframe, even a balanced option may experience several negative years before delivering its average long-term return.
If you only check your super when markets are falling, it can feel like something has gone badly wrong. In reality, balanced funds are built with the expectation that there will be periods of decline as well as recovery.
Short-term view
- Market falls can reduce your account balance.
- Negative headlines increase anxiety.
- Frequent checking can make volatility feel worse.
Long-term view
- Super is usually invested over decades.
- Regular contributions continue during market dips.
- Recovery and compounding matter more than one weak period.
What to review before making changes
If your superannuation balance is falling, the better first step is usually review, not reaction. Look at your investment option, your time to retirement, your risk comfort, fund fees, and any insurance held inside super before you decide to make changes.
Questions to ask
- Am I in the right investment option for my age and goals?
- Do I understand how my balanced fund is invested?
- Am I paying reasonable fees?
- Do I have insurance in super that I still need?
Common mistakes
- Switching after markets have already fallen.
- Choosing an option that does not suit your timeframe.
- Ignoring how default investment settings work.
- Making changes without personal advice.
Frequently asked questions
Why is my super going down if I am still contributing?
Your employer contributions may still be going in, but if investment markets fall at the same time, the market losses can outweigh those contributions for a period.
Is a balanced fund supposed to be safe?
A balanced fund is generally less volatile than a high-growth option, but it is still an investment option and can produce negative returns in some years.
Should I switch out of my balanced super option when markets fall?
Not automatically. Switching during a downturn can lock in losses, so it is usually better to review your goals, timeframe and strategy carefully before making a change.
How often should I review my superannuation?
It can help to review your super periodically, especially after major life changes, but checking too often during volatile markets can lead to emotional decisions.
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