Smarter Super - Invest in your future and make the most of your retirement
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Important Notice

This booklet gives information of a general nature and is not intended to be relied on by readers as advice in any particular matter.

You should consider consulting a financial adviser regarding how this information may apply to your own circumstances.

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A hand reaching above and placing a coin into a 'piggy bank'


Some people think of their superannuation as an asset – actually, superannuation is made up of potentially many different assets.

Most super funds offer some sort of investment choice to members. Put simply, investment choice is selecting the assets in which your superannuation will be invested, such as Australian shares, international shares, fixed interest, cash or property.

Asset classes like cash and fixed interest are sometimes described as conservative investments. They carry less risk in terms of potential volatility in returns and potential for capital loss, but they also offer less potential for high returns. These investments are generally described as low risk/low return.

Shares and property are generally described as growth investments since they offer investors the potential for higher returns. But this potential comes with higher risk. Returns could be volatile in the short-term.

Investment options vary from fund to fund. Some super funds define their investment options in terms of their risk characteristics, such as strategies ranging from growth or aggressive through to conservative or stable. Other funds offer more specialist options, such as strategies that adopt a ‘socially responsible investment’ approach.

Some funds let members have greater control over selecting types of underlying investments, such as choosing mostly shares. Other funds let you blend options which use different investment techniques, such as utilising alternative investments.

Rate of return over 45 years, reinvesting fund







* Difference over 45 years



* The difference of earnings is before tax, fees and other charges and expenses, and interest is compounded on an annual basis.

You don’t have to make an investment choice. But if you don't, your money will be invested in the fund's default investment option. This investment option may not necessarily be the most appropriate option for you.


Which investment you choose will be influenced by your personal views on ‘risk and return’. You might be quite prepared to risk short-term losses for potentially higher long-term returns. Or you might be quite risk averse and be more comfortable with less movement in the value of your investment. Your tolerance to investment risk is known as your ‘risk profile’.

One view about investing is when you're young you can afford to take some risk with your investments, but once you get close to retirement you need to become more conservative in your approach. But this view is being challenged by increasing life expectancies. At retirement age, people's money might need to last another 20 or 30 years, which is still a long-term ‘investment horizon’, so it may not be appropriate to be too conservative.

Placing too much of your super into conservative investments, such as cash, means you face lower risk than growth investments, such as shares, but you may also miss out on opportunities for higher returns. While you are contributing to super this means you could end up with a smaller final superannuation balance. When you are no longer making contributions and are retired, your investment returns may not even keep pace with inflation, meaning in effect your financial position goes backwards.

Your super fund will outline its investment approaches, the strategy behind each, the return it aims for and the risks involved. Taking the time to explore your investment options and making an informed choice could result in a significant boost to your final superannuation balance.

Take a look at the table below to see how much of a difference even 2% in earnings can make over time. Remember, since superannuation will be one of your biggest investments, it could be worthwhile speaking with a financial adviser to help you choose investment options which suit your circumstances.

Did you know?

Some people think about super as a single asset, but super is typically made up of a number of ‘asset classes’. You might already have investments in some of these asset classes. When choosing an investment option you should think about all your investments and the underlying investments in your super – that way you can see if you have ‘diversified’ your investments.


Before making an investment it is good to have an investment plan. Do your homework and take an active role in preparing your plan. Your plan should:

  • Outline your current financial position and needs
  • Identify your financial and life goals
  • Identify your ‘risk profile’
  • Identify investment strategies and options to manage your money.

Your investment plan can also describe how certain investment strategies will achieve your goals and the risks associated with each investment choice. A financial adviser will be able to help you prepare an investment plan and understand how to invest your super in a way identified in your investment plan.

If you’re not sure how your super is invested, check with your super fund which investment option your money is invested in. Most funds have simple procedures allowing you to make adjustments to your investment strategy. A small adjustment can make a big difference later.

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