Pick the best superannuation investment option to boost retirement balance

CHOOSING the best superannuation option for you can make a big difference to your balance at retirement.

HANDPICKING your superannuation investment option can make tens of thousands of dollars difference to your retirement balance.

Despite this many Australians remain confused about the different investment options available and which one is best suited to them.

Conservative investors or those nearing retirement tmay choose an option that is lower in risk but delivers smaller returns.

TELCOS: Smartphone customers could be paying way too much

On the flip side, those willing to take more of a gamble may take on higher risk and be subject to more to more volatility, but they could face negative returns.

Association of Superannuation Funds of Australia’s chief executive officer Dr Martin Fahy said members unsure about which option to choose should phone their fund and ask for help.

The Association of Superannuation Funds of Australia’s chief executive officer Dr Martin Fahy urges members to ask their funds for assistance with investment options.

“Find out which investment option you are in at the moment, your super fund will have loads of information on its website that will explain these options in simple English,” he said.

“It can make a difference to your balance at the end.”

The main investment options most funds offer include:

Cash: 100 per cent is invested in deposits with Australian deposit-taking institutions.

Balanced: Invests around 70 per cent in shares or property, the rest is in fixed interest or cash.

Conservative: Invests around 30 per cent in shares and property, majority is in fixed interest and cash.

High Growth: Invests in a range of assets including around 90 per cent of Australian and international shares and has a higher risk of negative return.

BORROWERS: Five home loan tricks your bank won't tell you

Dr Fahy warns “not to jump around too much” between investment options.

Electrician Darren Brown, 25, said 12 months ago he didn’t even know which fund he was with but he had since consolidated multiple super accounts and his funds were now on track.

Electrician Darren Brown, 25, took time to work out his investment option when he opened his superannuation account.

“I rang my fund and I chose the balanced option, but then I switched to high growth,’’ he said.

“In about February there was negative volatility in the market and I phoned my fund and asked to speak to a financial adviser who told me how much I lost, which was about $200.”

Sunsuper’s manager of comprehensive adviser services Evan Poole said funds did provide members with advice on what investment option was best suited to them.

“If members ask for advice we will tell them what option they should be in, no question,’’ he said.

Mr Poole said significant milestones including buying a house or turning 50 were good times to review how your super was invested.

CHOOSING YOUR INVESTMENT OPTION

— Consider your age.

— How comfortable you are with retirement risk.

— How long before you will be able to access your funds.

— Your retirement goals.

[e-mail]

@sophieelsworth