One of the main questions I get asked is “am I in the right super fund?”

My response is usually that the super fund you are in is less important than the investment option you have selected with your current super fund.

Most super funds have around 20 different investment options. PSSap, the Commonwealth Super Scheme accumulation fund, is rare in that it only has four, ranging from Income Focused through to Aggressive. Investment options such as the Aggressive one have a larger percentage of higher growth assets (such as shares and property). These should give higher long-term returns than the more conservative and less risky investments. However, there will be more volatility, so they are not suitable for everyone.

When you open an account with a super fund, they automatically put you in their default or balanced investment option. In many cases, this may not be the best option for you. Being in the wrong investment option could have big implications for how much you have at retirement.

To show why choosing the right investment option is important, let’s use Chris and Emma as an example. They are both 30, have $50,000 in super, and earn $80,000 per year. Chris is in the PSSap Balanced (the default option) which has had annual net returns of 7.65% over the past five years. Emma elected to go into the PSSaP Aggressive option which has had annual net returns of 9.41%. Assuming they continue to get the same returns, by the time they are 60, Chris will have $1.2 million. Emma on the other hand will have $1.6 million.

So how do you choose the right option?

The first thing to look at is your tolerance to risk. To do this, consider questions like do you cope well when things go wrong financially; when you think about large investments do you think more about the possible gains rather than the possible losses; are you confident that you can and do make smart financial decisions; and would you be prepared to take more risks in the hope you get better returns?

If you answer yes to most of these questions, you may be more suited to a higher growth investment option. If not, a more conservative investment option may be better for you.

The second step is to look at your need to take risks. This will be a combination of things like your age; your current super balance; your other assets; whether you own your own home; when you want to retire; whether you have a partner; how much income you want in retirement; whether you are willing to downsize to fund your retirement; and whether you will be eligible for the Aged Pension.

Finally, you need to look at your ability to withstand a financial setback. This is generally a combination of how close you are to retirement, your income and what other investments you have.

So, without being too dramatic, this week you should review your super and make sure you are in the right investment option. If you want some help or independent advice, book a chat via the button below. Alternatively contact us on 0417 034 252 or at

About the Author
Phil Harvey is an independent financial adviser. In 2017 Phil set up his company Construct Wealth to help clients best manage their finances so they focus on what is important to them. He is a founding member of the Profession of Independent Financial Advisers and a tax financial adviser, registered with the Tax Practitioners Board.

General Advice Warning
This advice contains general information. It may not be suitable to you because it does not consider your personal circumstances. Phil Harvey and Construct Wealth are authorised representatives of Independent Financial Advisers Australia (AFSL 464629)