After a stellar FY25, with the median Australian superannuation fund delivering a remarkable 10.5% return (according to Chant West data), many Aussies are wondering: what can we expect for our retirement savings in FY26? It's natural to be curious, and understanding potential growth is key to securing a comfortable future. Let's break down what's influencing superannuation performance and what experts are predicting.

FY25: A Year of Strong Returns

The impressive 10.5% return in FY25 represents a significant win for super fund members. This figure encompasses both capital growth (the increase in the value of investments) and dividends (income generated from those investments). While past performance isn't a guarantee of future results, it does provide a baseline for understanding current market conditions and the capabilities of fund managers.

What's Driving Superannuation Growth?

Several factors are at play influencing superannuation returns. Here's a look at the key drivers:

• Economic Conditions: Australia's economic outlook, including inflation rates, interest rates, and overall growth, significantly impacts investment performance. A strong economy generally supports higher returns.
• Investment Markets: Super funds invest in a diverse range of assets, including Australian and international shares, property, and fixed income. Performance in these markets directly affects super returns.
• Global Events: Geopolitical events, global economic shifts, and commodity price fluctuations can all impact investment values.
• Fund Manager Performance: The skill and strategy of your super fund's investment team are crucial. Funds with strong track records often outperform.

FY26 Outlook: What to Expect

Predicting the future with certainty is impossible, but experts are offering insights into the FY26 outlook. Most analysts anticipate a more moderate return compared to the exceptional performance of FY25. Here's a summary of the current consensus:

• Lower Growth Expectations: While still positive, growth is expected to be in the range of 6-8%, reflecting a more cautious economic environment.
• Interest Rate Impact: The Reserve Bank of Australia's (RBA) decisions on interest rates will continue to play a vital role. Higher rates can impact borrowing costs and potentially dampen economic growth.
• Inflation Concerns: Persistently high inflation can erode returns, as it reduces the real value of investment gains.
• Share Market Volatility: Expect continued volatility in share markets, influenced by global economic uncertainty.

Tips for Maximising Your Super

While you can't control market conditions, there are steps you can take to improve your superannuation outcomes:

• Review Your Fund: Regularly assess your fund's performance and fees. Consider switching to a fund with a better track record and lower costs.
• Consolidate Your Super: If you have multiple super accounts, consolidating them can reduce fees and simplify management.
• Make Extra Contributions: Consider making additional voluntary contributions, especially if you're eligible for a tax deduction.
• Update Your Investment Strategy: Ensure your investment strategy aligns with your risk tolerance and retirement goals.

The Bottom Line

While FY26 may not replicate the exceptional returns of FY25, a positive outcome is still possible. Staying informed, reviewing your fund, and making smart choices can help you maximise your superannuation savings and build a secure financial future. Keep an eye on economic news and expert analysis to stay ahead of the curve.