Super Investment options – what’s right for you?
When it comes to superannuation, Rest offers a range of investment options.
If there’s one thing certain in life it’s change. And generally your attitude towards saving and investing will change as you get older.
How your super is invested when starting your first job may not be the right approach when you’re approaching retirement. Luckily you can change your investment options at any time and this could make a real difference to how much money you have when you retire.
Different funds usually offer a range of different investment options to choose from. If you haven’t selected an investment option, you’re probably invested in your fund's default option, which will generally take a balanced approach to risk and return.
To get up to speed on your super investment options, we’ve provided answers to three commonly asked questions: how your money is invested, the different options available, and how your stage of life may influence your preferences.
What do super funds do with my money?
For any contributions you make into your super fund (be that Super Guarantee contributions or any additional and voluntary contributions), they will typically invest your super savings 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 and generally the main difference will be the level of risk you’re willing to take to potentially generate higher returns.
If you’re not sure what you’re invested in, contact Rest today. You can also see your current investment options by logging into the Rest App – this will also give you a current balance and the ability to manage how your super is invested.
What are the super investment options I can choose from?
Like most super funds, Rest lets you choose from a range of investment options. These might include ‘high growth’, 'diversified', 'balanced', and 'cash' but the terms can differ across super funds. Here’s a small sample of the typical type of investment options available:
Growth options aim for higher returns over the long term, however losses can also be notable when markets are volatile. They typically invest around 85% in growth assets like Australian and international shares.
Balanced options don’t aim to perform as well as growth options over the long term, but potential losses are also likely to be smaller when there are market downturns. They typically invest around 70% in growth assets like shares, with around 30% invested in more defensive assets like bonds and cash.
Conservative options generally aim to reduce the risk of market volatility and therefore may generate lower returns. They typically invest around 35% in growth assets like shares, with the rest in more defensive assets like bonds and cash.
Cash options aim to generate relatively lower but more stable returns to safeguard the money you’ve accumulated. Rest offer two cash options which, depending on the cash option, invest either exclusively in deposits with Australian deposit-taking institutions, such as banks, building societies and credit unions, or in other short dated government or bank issued securities.
All super funds may have different asset allocations, so it’s important to read the Rest product disclosure statement before making any decisions. It could be a good idea to consider factors such as your current stage in life, and future plans and goals before choosing the investment option that’s right for you.
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.
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 more conservative approach.
While many people put off thinking about super, being informed and engaged from a young age and throughout your working life may make a big difference to the returns generated and your final super balance.
Login to MemberAccess to find out what investment option your super savings is invested in and manage how your super savings are invested; or book a call with the Rest Advice team today.