You just learned to put money into super. This lesson makes sure it isn't quietly eaten on the way — the easiest, lowest-risk super win there is.
1The idea
Your super fund charges a fee every year — a percentage of your whole balance. One fund's option might charge ~1%, another ~0.1%. That gap sounds trivial. It isn't.
Because the fee is taken every year for decades, it compounds against you exactly like returns compound for you. A 1% fee on a balance that should double several times over your career quietly skims a fortune. And unlike investment returns — which you can't control — the fee is almost entirely in your hands.
The cheapest way to cut the fee is usually a low-cost index option — it just tracks the market instead of paying managers to pick stocks.
2Who it's for
Everyone with super — which is almost every working Australian. It matters most if:
You're younger or have decades until 60 — more years for the fee to compound against you.
You're in an expensive retail or actively-managed option, or an old default fund you've never checked.
You have a larger balance — the fee is a percentage, so the dollars grow with it.
3The worked example
A $50,000 balance, $10,000/yr going in, an 8.98% gross return (Hostplus Indexed Balanced's since-inception return), over 30 years — the only difference is the fee:
High-fee fund (1.0%/yr)$1,629,000
Low-fee index option (0.10%/yr)$1,975,000
The low fee leaves you with+$346,000
A ~0.9% fee difference — a rounding error, surely — costs this person more than a third of a million dollars. Nothing else in this course is this easy: same money, same market, one form.
4Try it on your numbers
What your fee costs you
Over30 yrs
Gross return8.98%
Default 8.98% ≈ Hostplus Indexed Balanced's return since inception — past performance, not a guarantee of the future.
High-fee fund1.00%
Low-fee index0.10%
≈ Hostplus Indexed Balanced sits near the low end (example, not a recommendation)
Low-fee index option$1,974,722
High-fee fund$1,629,047
low-fee index high-fee fund
The low fee keeps you+$345,675
Both options assume the same gross return — the only difference is the fee dragging on the balance each year. A simplified illustration; real fees include admin + investment components and returns vary. Estimates only, not financial product advice.
5The honest caveats
A low fee isn't a guaranteed higher return — but the fee is certain and returns aren't. Cutting it just stops avoidable leakage.
Compare like-for-like. An "indexed balanced" option is ~70–75% growth assets — match it to your risk and timeframe, not just the price.
Check your insurance first. Switching funds can cancel life/TPD cover. Switching the option within your current fund usually keeps it.
Hostplus Indexed Balanced is named only as a well-known example of a low-cost index option — not a recommendation. Read the PDS, compare, and get licensed advice if unsure.
6How to action it
Find your fund's total fee (investment + admin) on your annual statement, the PDS, or the ATO's YourSuper comparison tool.
Compare it to a low-cost index option — e.g. Hostplus Indexed Balanced, or your fund's own index option.
Switching the investment option inside your fund is often free and keeps your insurance. Changing funds — check insurance first.
Do it once. It then compounds in your favour for the rest of your working life.
General educational information, not personal financial product advice. Funds, fees and options are named only as examples — always read the current PDS and consider licensed advice before switching. Figures are estimates for FY2025-26.