Super investment options – what’s right for you?

Choosing the right investment option at the right time could make a difference to how much money you have in retirement.

When it comes to your superannuation, the investment options you choose today and in future may impact how much money you retire with.

If you haven’t selected an investment option within your super, you’re not alone—80% of the population do not exercise choice and are invested in their fund's default option.1

This approach can be less work, but it’s worth making an informed decision. After all, it is your money and super is likely to be the biggest investment you’ll ever have next to buying a property.

To get you up to speed we’ve answered some commonly asked questions around how your money is invested, the different options available and how your preferences can affect your returns at any age.

What do super funds do with my money?

Typically 9.5% of your gross salary is paid into super, which is taxed at 15%. Your super fund will invest this money over the course of your working life so you can hopefully retire comfortably.

Your super fund will let you choose from a range of investment options—generally the main difference is the level of risk you’re willing to take to potentially generate higher returns.

If you haven’t selected an investment option, your super fund probably put you into a default option, which typically takes a balanced2 approach to risk and return.

What are the super investment options I can choose from?

Most super funds let you choose from a range, or mix of, investment options and asset classes. These might include 'growth', 'balanced', 'conservative' and 'cash' but the terms can differ across super funds. Here’s a small sample of the investment options3 available and what they generally aim for:

  • Growth options aim for higher returns over the long term, however losses can also be notable when markets aren’t performing. They typically invest around 85% in shares or property.
  • Balanced options don’t tend to perform as well as growth options over the long term, but the loss is also less when there are market downturns. They typically invest around 70% in shares or property, with the rest in fixed interest and cash.
  • Conservative options generally aim to reduce the risk of market volatility and therefore may generate lower returns. They typically invest around 30% in shares and property, with the rest in fixed interest and cash. 
  • Cash options aim to generate stable returns to safeguard the money you’ve accumulated. They typically invest 100% in deposits with Australian deposit-taking institutions, such as banks, building societies and credit unions.

Super funds may have different allocations, so it’s important to read your super fund’s product disclosure statement.

What’s the right investment option for me?

Choosing the most suitable investment option generally comes down to your goals for retirement, your attitude to risk and the time you have available to invest.

For instance, if you’re young, you may have more time to ride out market highs and lows, and therefore be willing to take on more risk in the hope of achieving higher returns.

If you’re closer to being able to access your super, you may prefer a conservative approach as a share market crash could be harder to recover from than if you’re 20 years away from retirement.

Different options may suit you at different ages. Our calculator can help you determine what investor style you are, or if you want to explore strategies with an expert we can help you find an adviser.

While many people put off thinking about super, being informed and engaged from a young age and throughout your career may make a big difference to the returns generated and your final super balance.

Where can I find tools to help me on my way?

Choosing your super fund

Find out what choices you have when it comes to super and the types of funds available with our online module. 

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What investor style am I?

This calculator will demonstrate the relationship between risk and return, as well as the impact of your time horizon. The higher the potential returns, the more risk you're going to have to take to achieve them. The more time you have, the more risk you are able to take, as long as you're comfortable with it.

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© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.