I just did some simple analysis of balanced fund returns and on a time weighted basis (excluding tax), balanced funds returned on average a compound monthly return of 0.38% in the ten years to the end of August 2011. This is equivalent of a compound annual growth rate of approximately 4.7%.
I then assumed the annual household income was around $70,000 and assumed the 9% superannuation contribution was added to a starting balance of $10,000 growing at around 3.6%pa across the same 10 year period. Low and behold it turns out the compound monthly return ended up being 0.33% which is the equivalent of approximately 4.06%pa.
So in this second scenario the average return dropped around 0.64%pa. This is because the worst returns over the last 10 years were in the latter half. So when they are applied to a larger balance the impact is far greater. Therefore, the risk your portfolio takes as retirement approaches is critical as a nasty return shock when your balance is highest can be quite damaging to your retirement health.