Want to add thousands to the account balance of your super when you retire? Then make sure the investment option you have selected for your super account matches your risk profile, as that single decision can make thousands of dollars difference to your eventual retirement savings. Don’t know what a risk profile is? ... Read more
Choosing an investment option (Investment choice)
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 the SuperGuide section on SMSF investment.
To learn about the key aspects of choosing a super investment option, see the following SuperGuide articles:
Set out below are all SuperGuide articles that relate to Choosing an investment option (Investment choice).
What are unit pricing and crediting rates and why do they matter?
Understanding why your super balance goes up and down – and comparing the performance of your super fund with other funds – is about more than just checking fees, super contributions and insurance premiums. It’s also knowing how – and when – your super fund calculates and applies investment earnings to the balance of ... Read more
How accurate is your ‘retirement estimate’? 7 assumptions you need to understand
When opening their annual member statement, many super fund members see a comforting projection of how much their account balance is likely to be when they retire, and how much income it will provide in retirement. According to super industry researcher SuperRatings, 42% of super funds now provide retirement ... Read more
10 key super fund fees: What are they and why am I paying them?
Nobody likes paying fees, particularly when you can’t see what you’re paying for. So when it comes to your super fund, it’s worth learning a bit more about the fees you’re paying and why. Like most things in the super industry, the fees you pay depend on the type of super fund you are a member of, and how you decide to ... Read more
What are lifecycle super funds, and how do they perform?
Click here to jump to the latest returns for lifecycle super funds. Close to 70% of Australians with super in one of the major funds are invested in their fund’s MySuper option, the default option for employees who don’t choose a super fund. If you are a member of a retail fund, this is most likely a lifecycle product ... Read more
Monthly super fund performance Reckoner: Monthly returns for 5 investment categories
In the reckoner below you can view the median monthly investment returns for 5 superannuation investment options. We’re grateful to Chant West for providing the statistics that power the reckoner. See also: Super fund performance: Monthly returns to October 2019 ImportantSuperannuation is primarily a long-term ... Read more
Super fund performance: Monthly returns to October 2019
In this article you can discover the latest monthly performance for super funds over 5 investment options. We’re grateful to Chant West for providing the statistics in this article.For annual and long-term super fund performance see the following SuperGuide articles:Super fund performance over 27 financial years (to ... Read more
Super fees and returns calculator
Hands up if you know what fees your super fund charges? No idea? You’re not alone. Most super fund members are aware that being in a fund with superior investment performance will mean a bigger retirement balance. One of the key findings of the Productivity Commission report on super was the negative effect being in a ... Read more
7 ways your super fund manages investment risks
Like it or not, investing to grow a retirement nest egg involves taking some risks. Super funds use a variety of strategies to help reduce the inevitable investment risks they face as they work to deliver good investment returns to their members. To help you understand how your fund is investing your super savings, ... Read more
Investment indexes: 5 reasons they matter for your super
When it comes to the investment performance of your super account, funds love to talk about how much they have outperformed the index or benchmark. But what does that really mean? And what the heck is an investment index anyhow? To help you cut through the jargon, here’s an uncomplicated explanation of investment ... Read more
How to invest in infrastructure through an SMSF
Self managed superannuation funds have a much wider array of investments available to them today than they did 10 years ago. However, some asset classes remain elusive due to the scale needed to invest in them effectively, compared to the investment capabilities of most SMSFs. Infrastructure is one such asset ... Read more
Why big super funds diversify and what you can learn from it
It’s a common saying that we shouldn’t put ‘all our eggs in one basket’. Although it’s a lesson many smaller investors and super savers forget, it’s one large super funds always follow. So, why are large super funds so committed to diversification and what are the lessons smaller investors can learn from ... Read more
10 points to check on your annual super fund statement
When the statement for your super account appears in the mail or your inbox, it can be hard to know what to make of it. Member statements are often full of figures and terms you don’t quite understand, making them a daunting read. But it’s important to check at least a few key points to ensure your retirement savings ... Read more
9 investment risks and how they can affect your super
The reality is, when you’re saving for your retirement, you’re exposed to a range of different risks that can affect your investment returns and how much money you end up having in your super account when you decide to finish working. We look at 9 investment risks and the impact they can have on your retirement nest ... Read more
5 ways sequencing risk affects your retirement
Everyone knows about Murphy’s Law, but the old adage that ‘anything that can go wrong, will go wrong’ is really important when it comes to your retirement plans. Among financial nerds, this concept is known as sequencing risk. And it has the potential to wreak havoc on your retirement plans. So, what is sequencing ... Read more