Should Australians invest for growth or income in superannuation?
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Australians who put money into superannuation need to choose how to invest it. The choice is about investing in growth assets or income based ones or a combination of both. Growth investing usually gives higher returns over time because of capital gains. It’s more suited to younger people since they can ride out market ups and downs as they have a long runway ahead. KPMG’s Super Insights 2025 said that by June 2024, total super assets had reached A$3.9 trillion but share markets can swing hard and that can hit equity returns. Due to this, people nearing retirement often look for steadier options. They want income strategies that pay out regularly and give a bit more security.
Income focused investing usually means bonds, infrastructure assets or stocks that pay dividends. These don’t grow as fast as growth assets but they provide relatively more predictable results. This is becoming very important as around 2.5 million Australians are expected to retire in the next ten years. Most of them will want safer choices that keep risk low.
Superannuation funds are adapting and evolving to provide members with better choices. Industry funds now hold about 40% of total market share compared to just under 28% for self managed funds. Investment flows also show capital being deployed in infrastructure which is about A$118 billion inside Australia, a sector liked for both long term growth and steady income. They also have become a key source of money for Australia’s energy transition which shows the importance of keeping some growth assets but with global slowdowns having a mix of growth and income looks more important than ever. For most Australians it is not a one side decision. Many choose a balanced or lifecycle plan where the allocation slowly moves from growth to income as retirement gets close. This way members can use compounding in their younger years and still hold stability later. At the end of the day the choice really depends on age, risk comfort and retirement plans but Australia’s super system is strong enough to give mixed strategies to suit different needs.
source - Company announcements
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