Choosing the right investment option can have a big impact on how long your super will last. So it’s important to choose an option that reflects your financial needs and attitude to risk.
Most super funds offer a variety of investment options with varying levels of risk. In investment terms, risk is the chance that the actual return will be different to the expected return.
If you have a longer-term investment horizon—say at least 10 years—then you probably have enough time to recover from the inevitable market downturns that occur as a natural part of the investment cycle.
So if you don’t need your super any time soon, investing in growth assets like shares and property could be a good way to maximise your investment returns.
But if you’re planning to access your super in the next few years, you might not have the time to ride out any market volatility. In that case, a defensive investment strategy with more exposure to cash and fixed interest is probably a better option.
What happens if you don’t choose?
Generally, if you don't choose your investment option, your super fund will put your super into a default investment option.