"Picking the right investment option is important as this will influence how much money you'll have to retire on," says Natasha Panagis, technical specialist with the advisory firm Centric Wealth. . While adjustments had to be made to take account of super's contributions caps (which were assumed to be unchanged), the calculation found that someone whose super fund generated 5% a year would end up with $1.367 million, or around $562,000 in today's dollars (assuming an annual inflation rate of 2.5%). As you get older the assets your super is invested in begin to change, as does the level of risk you're taking on. That’s where the balanced option can have the edge. The best super investment option will be different for everyone, depending on what you are trying to achieve and your appetite for risk. You can find out about your fund's investment options by checking its website or product disclosure statement (PDS). MTAA is a national super fund available to all Australians with a focus on the motor trades and automotive sector. For most people, that won't happen until they retire. The risk level and asset allocation will vary between different super funds, though this option is usually a similar level of risk as the balanced investment option (medium to high risk). Most funds allow you to change your super investment options online. Actively managed investments are pools of money managed by professional fund managers. It’s important to regularly assess your investment option over time as your circumstances change and to make a switch if necessary. While you may be able to switch to a better-performing option in your existing fund, sometimes you will need to switch funds altogether to get the option and returns you want. It’s an easy one – if your investments, or the risk of losing money on them, keep you awake at night, you’ve got the wrong investments. The higher the return, the higher the risk. Video: Which investment option is right for you? Investment Option. March 13, 2020 by Barbara Drury Leave a Comment. performance. Defensive assets on the other hand carry much less risk, but also don't offer very high returns. We’re committed to our readers and editorial independence. Some super funds let you choose the mix of different asset types or pick direct investments. Moving to a more conservative investment option such as cash can also lock in your losses and mean you don't benefit when the market recovers, so it may not be a suitable strategy for anyone who has some years to go before they retire. And it's not only the tax saving you make when contributing. Your investment horizon just got a whole lot longer! So, if these experts struggle to outperform a set-and-forget index fund, what hope do you have? In fact, some of the best-performing balanced options over the 10 years to the end of June were industry super funds. Well, the purpose of superannuation is to … If you’re unhappy with how your super savings have grown, it’s worth considering whether you’re in the right investment option in your super fund. You can find out about your fund's investment options by checking its website or product disclosure statement (PDS). risk profile, risk tolerance or risk appetite, put you in touch with a financial planner. It’s been a long time coming, but a group of superannuation industry professionals is proposing a set of standards to categorise growth and defensive assets. “Your Industry SuperFund has financial planners who can assist you with the big decision of what to do with your retirement savings, including which investment option is right for you,” she says. Fit cats and fat cats: Which are the best and worst super funds? For many people, a well-diversified pre-mix option is all you need. Let's take a look at these options in a bit more detail. Learn more about Finder. The balanced option is usually the default option offered by super funds. Achieve a balance of risk and return by investing in both growth assets and defensive assets. Most people largely ignore superannuation, unfortunately, and simply leave it to look after itself. The QSuper Lifetime fund adjusts your investments each 7-10 years as you get older, so you're not taking on too much risk. A more aggressive portfolio will have a higher allocation to growth assets such as shares and property, while a more conservative portfolio will have a higher allocation to defensive assets such as cash and fixed interest.
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