How to choose the right super fund for your goals
- aussiefinanceinsig
- Mar 19
- 4 min read
Superannuation is your gateway to retirement, and with over 100 funds managing Australia’s $3.5 trillion super pool (APRA, 2024), your choice can shape your financial future. Whether you’re after strong returns, low costs, or ethical investments, picking a fund that fits your goals takes some homework. This guide walks you through the key factors to consider—without telling you what’s best for your unique situation. That’s where a financial adviser comes in if you need it. Let’s dive in.
Why Your Super Fund Choice Counts
The average Aussie has around $150,000 in super by their 40s (ATO data), but where it’s invested can swing your balance by tens of thousands over time. A fund with high fees or lackluster returns might leave you short, while one aligned with your priorities could set you up nicely. Here’s how to figure out what works for you.
Step 1: Clarify Your Goals and Timeline
Super funds aren’t one-size-fits-all—they’re built for different stages and preferences. Consider:
Time Horizon: Got 30 years until retirement? You might lean toward higher-growth options. Closer to retiring? Stability might matter more.
Risk Tolerance: Are you comfortable with market ups and downs, or do you prefer a smoother ride?
Values: Do ethics (e.g., avoiding fossil fuels) or flexibility (e.g., property investment options) factor in?
Think about your priorities—returns, costs, insurance, or sustainability—and jot them down. They’ll guide your research.
Step 2: Dig Into Performance
Past performance isn’t a promise of future results, but it’s a useful benchmark. The ATO’s YourSuper comparison tool tracks 7-year returns for MySuper products—check it out. Here’s what you’ll see:
Investment Mixes:
Growth: 70-90% shares/property, averaging 7-9% p.a. over 10 years (e.g., AustralianSuper Growth, 8.2% p.a.).
Balanced: 50-70% shares, around 5-7% p.a. (e.g., Hostplus Balanced, 6.5% p.a.).
Conservative: Mostly cash/bonds, 2-4% p.a.—lower risk, lower reward.
Comparison: Look at how a fund stacks up against its peers. A Growth option returning 6% when others hit 8% might signal underperformance.
Risk Levels: Higher returns often mean bigger swings—check the PDS (Product Disclosure Statement) for details like “standard deviation” if you’re curious.
Performance varies by your timeline and comfort with risk, so weigh what suits your stage of life.
Step 3: Understand Fees
Fees can chip away at your super over decades. A 1% fee difference on $100,000 over 20 years (at 7% growth) could mean $87,000 less at retirement. Here’s the rundown:
Administration Fees: Covers fund operations—often $1/week + 0.1%-0.5% of your balance. Industry funds (e.g., REST) tend to be lower than retail funds (e.g., AMP).
Investment Fees: For managing your portfolio—0.1% for cash options, up to 1% for Growth.
Indirect Costs: Buried in returns—PDS has the fine print.
Advice Fees: Only if you opt for their planners.
Explore: Use the YourSuper tool or Chant West’s fee comparisons to see total costs. Lower fees can boost your balance, but it’s about balance—cheap doesn’t always mean best.
Step 4: Explore Insurance Options
Most super funds offer life, TPD (total and permanent disability), and income protection insurance, with premiums deducted from your balance. It’s a common feature, but it’s worth a closer look:
What’s Available: A 35-year-old might get $300,000 life cover for $300-$600/year, depending on the fund.
Considerations: Insurance can provide peace of mind, especially if you’ve got dependents. But if it’s not a priority, those premiums add up—hundreds yearly.
Review It: Check the PDS for costs and coverage. Some funds let you adjust or opt out—log into your account or call them to explore your options.
It’s a trade-off between protection and cost—something to weigh based on your needs.
Step 5: Match Your Values
Ethical investing is on the rise—sustainable super funds grew 15% in 2024 (Responsible Investment Association Australasia). If you care where your money goes:
Examples:
Future Super: Fossil-free, 7.5% p.a. (5 years).
Australian Ethical: No coal or gambling, 6.8% p.a.
Aware Super: Offers “Sustainable” options.
How to Check: Funds list holdings online—search for industries you’d rather avoid or support.
If ethics aren’t your focus, you might prioritize performance or fees instead.
Step 6: Look at Extra Features
Some funds go beyond the basics:
Flexibility: Hostplus or Cbus offer paths to Self-Managed Super Funds (SMSFs) for property or direct shares.
Tools: UniSuper’s seminars or REST’s app might add value.
MySuper: Default funds are low-cost and simple—great for hands-off types, less so if you want control.
These extras might tip the scales if you’re torn between funds.
How to Research and Switch
Set Your Criteria: Age, risk, values—narrow your focus.
Shortlist Funds: Try 3-5 like AustralianSuper, REST, or QSuper—use YourSuper or fund sites.
Dive Deeper: Compare returns, fees, and insurance in the PDS (search “PDS [fund name]”).
Check Your Current Fund: Log into MyGov—see what you’ve got now.
Make a Move: Join a new fund online and roll over old balances via MyGov—usually quick and free.
Example Scenarios:
Early Career (30s): Might explore Growth options with 8%+ returns, moderate fees (0.8%).
Pre-Retirement (50s): Might lean toward Balanced, 6% returns, low fees (0.6%), with insurance tailored to family needs.
Pitfalls to Watch
Stapled Funds: Since 2021, your super follows you across jobs—confirm it’s a solid performer via MyGov.
Lost Super: $17 billion is unclaimed (ATO, 2024)—consolidate old accounts for free online.
Overhype: Flashy ads don’t guarantee results—stick to the numbers.
Wrapping Up
Choosing a super fund is about aligning it with your goals—whether that’s growth, security, or ethics. It’s worth spending an hour comparing options; your retirement could gain years of comfort. For a plan that fits your exact situation, a licensed financial adviser can step in. Your super, your future—make it count.
Disclaimer: This blog provides general financial information based on facts, not personal advice. It doesn’t consider your individual circumstances, goals, or needs. For tailored guidance, consult a licensed financial adviser. We aim for accuracy but aren’t liable for any decisions or losses based on this content. Use at your own risk.
Citations and Links:
Australia’s Super System Holds Over $3.5 Trillion (APRA, 2024)
Average Aussie Has About $150,000 in Super by Their 40s (ATO Data)
YourSuper Comparison Tool
Fee Impact Example: 1% Difference on $100,000 Over 20 Years = $87,000 Lost
Fund Performance Examples (e.g., AustralianSuper Growth 8.2%, Hostplus Balanced 6.5%)
Ethical Investing Growth: Sustainable Funds Grew 15% in 2024 (Responsible Investment Association Australasia)
Future Super (7.5% p.a.), Australian Ethical (6.8% p.a.) Returns
$17 Billion in Lost Super (ATO, 2024)
Chant West Fee Comparisons
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