By your mid-40s, many Australians are at peak financial pressure. Mortgages, school fees, and the rising cost of living squeeze household budgets, while superannuation can slip to the back of the priority list. Yet this is also a critical decade: the years where smart investing choices can turn average balances into retirement-changing sums.
According to the Australian Retirement Trust, someone aged 45 should ideally have more than $225,000 in super to stay on track. The average balance, however, is often tens of thousands of dollars lower. The gap may feel daunting, but it highlights why the right portfolio mix matters more than ever.
Core and satellite: A smarter framework
The core and satellite strategy gives structure to investing at this stage.
- The core: Broad, low-cost exposures — usually superannuation growth options or index ETFs. Think of funds like the Vanguard Australian Shares Index ETF (ASX: VAS) or the iShares S&P 500 ETF (ASX: IVV). These provide diversification, capture market returns, and keep fees to a minimum.
- The satellites: Higher-growth or thematic opportunities. This is where investors can tilt towards global technology leaders, emerging markets, or small-cap companies with room to expand. The aim isn't to gamble, but to complement the steady core with growth drivers that could boost long-term returns.
At 45, you still have ~20 years of compounding left. Satellites are the accelerators, while the core is the engine. Together, they create balance and resilience.
Topping up super in smarter ways
Superannuation remains the most tax-effective vehicle for retirement wealth, so topping it up can be a powerful move. Salary sacrifice and concessional contributions reduce taxable income while adding to your retirement savings. Even modest amounts compound significantly when left for two decades.
However, the overlooked lever is where those super dollars are invested. Many Australians default into conservative or balanced options, which may limit growth. For someone in their mid-40s, a growth or high-growth allocation could capture more of the market's upside while there's still time to ride out volatility.
Building wealth outside super
While super is crucial, it's locked away until at least age 60. That's why building wealth outside super is equally important.
ETFs offer a simple entry point. Beyond the ASX 200, investors can add robotics and artificial intelligence ETFs, or global defence ETFs, each linked to long-term megatrends. For those comfortable with more risk, small-cap shares can add growth potential. These companies are often under-researched and can deliver outsized returns if they execute well.
And don't overlook alternative assets. Gold, Bitcoin (CRYPTO: BTC), or private credit funds may not form the bulk of a portfolio, but small allocations can provide diversification and a hedge against market shocks.
Growth via asset selection and time
The most powerful wealth driver at this stage isn't just how much you save; it's where you place it, and how long you let it grow.
For example, a $20,000 investment compounded at 9.3% annually over 20 years grows to around $115,000. Add regular contributions — say $500 a month — and the portfolio can snowball into the hundreds of thousands.
Warren Buffett captured it best: "Someone is sitting in the shade today because someone planted a tree a long time ago." Your 40s are the perfect time to plant aggressively, letting growth assets compound while you still have time on your side.
Foolish Takeaway
The average super balance at 45 might look underwhelming, but the next two decades can be transformational. By combining a core of broad-market investments with satellite allocations to growth sectors, global themes, and small caps, and by topping up super while also investing outside of it, Australians can reshape their retirement trajectory.
At 45, you're not running out of time: you're entering the compounding sweet spot. The portfolio mix you choose today could be the difference between scraping by and enjoying the freedom of financial independence.
