Choosing an investment option

Choosing an investment option in your super fund is an important decision, though it’s one that many Australians neglect. Around 80% of Australians with superannuation accounts have their money invested in the default option, which is where you’re placed if you don’t choose an investment option.

Default options are usually ‘balanced’ or ‘growth’ investments and normally have around 60-80% of their funds invested in growth assets such as shares and property. These options are designed as an appropriate investment strategy for a large number of members across the many years they will be saving for their retirement.

However, your fund’s default option may not be best for your particular circumstances and risk profile. It’s important to understand that different types of investments have different levels of risk. In general, the higher potential investment return, the higher the risk, and vice versa.

It’s important to regularly assess your investment option over time as your circumstances change and to make a switch if necessary. For example, you may want to choose a different investment option in retirement if you’re receiving a pension.

See also our section on SMSF investment.