Most people never choose an investment option, so their super sits in the fund’s default MySuper option, usually labelled “balanced” or “growth”. That’s not a bad place to be. But it’s worth knowing what you’re in, because over 30+ years the option can change your balance by hundreds of thousands of dollars.
What the options hold
| Option | Typical mix | Ups and downs |
|---|---|---|
| Cash | Bank deposits and short-term securities | Almost none, but returns may barely beat inflation |
| Conservative | Mostly bonds and cash, some shares | Small falls in bad years |
| Balanced | About 60–75% shares and property, the rest bonds and cash | A negative year every five or so |
| Growth | About 75–90% growth assets | Larger falls in downturns |
| High growth | Close to 100% shares and other growth assets | Can fall 20–30% in a severe crash |
What the difference could mean
Illustrative long-term returns after investment costs, using our calculator with 0.8% admin fees, a $80,000 salary, retiring at 67:
| Option | Assumed return | Age 30 with $40,000 | Age 55 with $300,000 |
|---|---|---|---|
| Cash | 3% | $333,000 | $383,000 |
| Conservative | 5% | $499,000 | $469,000 |
| Balanced | 6.5% | $695,000 | $547,000 |
| Growth | 7.2% | $817,000 | $587,000 |
| High growth | 7.8% | $941,000 | $624,000 |
For the 30-year-old, the gap between cash and high growth is enormous, because there are 37 years for the extra return to compound. For the 55-year-old, it’s much smaller, while the risk of a big fall just before retirement matters more.
How to choose
- Time horizon first. Money you won’t touch for 20+ years can usually ride out market falls. Remember that retirement isn’t the finish line: a 67-year-old may still be drawing on super at 90.
- Can you sit through a 25% fall without switching? Switching to cash after a crash locks in the loss. The worst outcome is a high-growth option you abandon at the bottom.
- Lifecycle options shift you from growth to more defensive assets automatically as you age. Many default funds already do this.
- Don’t chase last year’s winner. Compare 7–10 year returns for similar options.
Switching options
Switching is usually free or cheap and done online in minutes. Within the same fund, it doesn’t trigger capital gains tax for you personally. If you change options, do it as a considered decision and leave it alone, rather than reacting to the news.
Model your own return in the super calculator, or read how much super you should have at your age.
Frequently asked questions
Is a balanced option safe?
It’s diversified, not risk-free. Balanced options still fall in bad years, though usually less than growth options.
Should I move to cash when markets fall?
Usually not. You’d sell after the fall and often miss the recovery. If market swings worry you, choose a more defensive option you can stay in.
What is MySuper?
A simple, low-cost default product every fund must offer. If you didn’t choose, you’re probably in one.
