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How to choose super investment options

Peter Terlato avatar
Peter Terlato
- 6 min read
How to choose super investment options

Your superannuation fund invests money on your behalf and typically allows you to choose from a range of different investment options. Selecting suitable investments can help you build a generous balance to accommodate a comfortable retirement.

The super fund investments you choose may vary based on a variety of factors including age, priorities, risk appetite, contributions, personal values and ethics. Therefore, the investment strategy you elected when you first began working may no longer be appropriate now, and as you approach retirement age

Most funds allow you to modify your investment preferences at any time. If you haven’t ever selected a specific investment portfolio, your money is invested in the fund’s default option, which often adopts a balanced approach between risks and returns.

To help you make an informed decision, it's important to consider what type of investor you are; how your money is invested; the various strategies available; the effects of where you’re at in your life and career on your superannuation priorities; and the average super balance.

Type of investor

The best super investment option depends on the type of investor you are. Three important considerations are:

Investment horizon

The length of time you want to invest your funds before retirement and the number of years post-retirement you want your money to last will determine your investment horizon. Taking the time to calculate these timeframes can help focus your investment priorities and strategy. This can be done at different times throughout your life and career in order to reshape and properly concentrate your goals.


Choosing specific investments can impact your fund’s growth and how long your savings will last. Before you make any determinations, it may be sensible to contemplate how involved you want to be in deciding your investment strategy and who you might allow to assist you. You can rely on the default option where your level of control is low, opt to make some definitive decisions or take direct control of your investment portfolio. 

You may choose to do this by starting a Self-Managed Superannuation Fund (SMSF). While this may seem ideal in theory, it may not be the best choice for every Australian. SMSFs can pose bold challenges, as well as legal and regulatory compliances that can drive up costs.

Risk appetite

Different types of investments incur varying risks that also depend on your investment horizon. If you invest for the short term (five years or less), there is a higher risk of fluctuations impacting your savings. In comparison, long term investments (20 years or more) may allow you to ride through market fluctuations and reduce your risk; however, long term risk is primarily ensuring that returns are in line with inflation.

How is your money invested?

Generally, no less than 10 per cent of your pre-tax salary is paid by your employer into your designated super fund, which is taxable at a rate of 15 per cent for balances up to $3 million. The money is invested while you’re working to help you retire comfortably.

There are typically two primary types of super funds - industry funds and retail funds - that can offer different options.

Your fund allows you to choose different types of Australian super investment options based on how much risk you’re willing to take. You can check where your super funds are invested via your individual fund’s website, which should show your current balance and projected savings over your lifetime.

Most funds give you a choice to invest in different options and asset classes. Although the exact terms may differ from one fund to another, some typical options include:


Growth investments aim for higher returns but also possess greater risks if the market performance is not as per expectations. Generally, about 85 per cent of your money is invested in property or shares.


Returns are generally lower compared to growth options. However, the risks are also reduced in case of market downturns. About 70 per cent of your funds are invested in property or shares, and the balance in cash or fixed interest investments.


The primary objective with this strategy is to reduce investment risk, and therefore, these investments generally generate lower returns. Only about 30 per cent is invested in property or shares with the balance of investments in fixed income securities or cash.


These investments generally generate stable returns on your accumulated savings. Almost 100 per cent of your funds are invested in deposit-taking institutions such as credit unions, banks, and building societies.

Green funds and investments

If you’re looking for more ways you can make ethical financial choices and choose to support sustainable initiatives, it may be worth considering investigating green super funds and investments.

A green superannuation fund, like an ethical super fund, may be one that supports net-zero initiatives and renewable energy companies and avoids fossil fuel ventures and other non-sustainable industries.

The effect of life stages on super investments

A life stage investment option means your super fund can automatically modify your investment portfolio based on where you fit within predetermined age brackets. The asset allocation changes as you move from one bracket to the next. Some of the typical age brackets include under 45, 45-54, 55-64, and 65 and over.

When you’re younger, the asset allocation is geared towards growth options such as shares and property. As you grow older, the investment mix changes to more conservative options, including bonds and cash.

Enacting this strategy can take some of the headaches out of choosing specific investment options throughout your life or career.

What is the average super balance for Australians?

Having an idea of the average superannuation balance for your age can help you to take the necessary steps to boost any shortfall. The Association of Superannuation Funds of Australia (ASFA) is the peak body for super.

The average superannuation balance, as per the latest figures released by ASFA, is shown in the table below:


Average Account Balance ($)

Median Account Balance ($)





25 – 29





30 – 34





35 – 39





40 – 44





45 – 49





50 – 54





You should remember that your balance may be higher or lower depending on your personal situation and needs.

Even a small difference between the performances of two funds can affect the returns over the years. Consider moving to a top performing fund to earn higher returns and accumulate a higher balance in your super.

Compare super funds

Product database updated 25 Jun, 2024

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.