You wouldn’t take a pair of boots if you needed sports shoes. You mightn’t buy slippers if you wanted something to go out in.

So why do almost 80% of Australians just accept the first investment option their super fund gives them? It makes as much sense as going for a run in a pair of clogs. That’s why it’s so important to pick the super investments that best match your needs, not everyone else’s.

What are super investment options

Within a super fund, your money is placed into “investment options”

These investments aim to grow your money, at different rates, and are generally separated according to risk.

Here are some examples:

• Growth. This is usually higher risk but higher reward option. Shares and property might be the focus here.
• Balanced. Most people find themselves in this option. The growth mightn’t be quite as high but there is a reduction in risk.
• Conservative. Aiming to reduce the risk of loss even more, but means growth may be lower again.

Things to consider

Everyone’s financial situation is different.

It doesn’t make sense to simply choose the same investment option for your super as your best friend, a sibling, a parent or even a neighbour.

It’s important to dig a little deeper and ask yourself these questions when deciding what option is right for you:

• How settled am I in my career?
• When do I plan to access my super? i.e. How long will I be investing for?
• How much risk am I willing to take on? i.e. what’s my ‘risk tolerance’?
• What kind of lifestyle do I want when I finish full time work?

I'm early into my career

If you’re young, it’s likely that you still have plenty of time until retirement.

So being aggressive in your investment options could be the move for you.

Given the nature of an aggressive option, your money is likely to fluctuate (up and down) over the shorter-term but ultimately your savings are expected to grow over time.

Just keep going back to that phrase “risk tolerance”.

Higher returns come with higher risk and volatility. But right now you’re in what’s called the “accumulation phase” of your career.

Market downturns will happen along the way. But your super has time to recover from any bumps it may encounter.

Targeting options with higher upside now could make a sizeable difference when you’re approaching retirement down the track.

Retirement is on the horizon

If you’re closer to the end of your working life than the beginning, you’re probably more focused on the details of your super.

Traditional thinking says this is the time you should be “de-risking”. You want to protect the value of your super balance rather than seeking higher returns. That’s understandable.

That would mean shifting your super from a more aggressive investment to a more balanced or conservative option.

One thing to consider is that retirement now means something a little different to retirement just a few generations ago.

You could now expect to live the retirement lifestyle for 30 or more years. That obviously impacts your super and your need for an income.

Should women consider "de-risking" later?

For women, there’s more to think about.

Women tend to live longer and, on average, have less money in their super than men. Plus, women are generally more likely to take career breaks, so their ability to wealth build is affected.

With this in mind, you may want to consider the choice to stay with an aggressive, high risk-high return option for longer to generate an income for longer.

Be active, be curious

Clearly, there’s a lot to consider when thinking about the right super investment option for you.

But investigate, research, and speak to your super fund – together, you can put yourself in the best possible position for retirement.

Whenever that may be.

Get advice

You may want to talk to a financial adviser before choosing an investment option.  To find out more please visit csc.gov.au/Members/Advice-and-resources/Financial-planning