Did you know that there is a difference between Accumulation super accounts and Defined Benefit accounts?

Most superannuation accounts are accumulation accounts. With this style of account, your retirement savings are determined by how much money is paid into the account and the investment returns after deducting costs and taxes.

Defined Benefit accounts are much less common than accumulation accounts and many defined benefit schemes are no longer open to new members. The final account balance is determined by a formula and although there is no set formula, they are usually based on length of service with an employer and your employment income. Defined benefit accounts are generally considered to be lower risk than accumulation style funds as your employer is obligated to ensure the fund can deliver the final super benefit at retirement regardless of investment performance. However during periods of strong investment returns, a defined benefit fund may provide a lower benefit than what an accumulation style fund may provide.

Did you know that super funds generally have a range of investment options to choose from?

Everyone has different financial circumstances. Some people have a long time left before retirement, some are nearing retirement age and some have other assets besides superannuation. This means that people need to make different choices about their investments.

Super funds generally cater for the needs of many different people by offering members a choice in how their super is invested.

To find out more about how your super can be invested, ask your super fund for a product disclosure statement.

Did you know that there are some important things to consider when choosing your super investments?

When you are trying to choose which investments to use for your superannuation, there are a few questions that may help:

• How comfortable am I with taking risks?
• What type of return am I seeking from my investment?
• How long will my super be invested?

With all investments there is a relationship between the return received and the risk taken to achieve it. If an investment carries a higher risk it should have the potential to compensate with a higher return over the long term. However, it will also have a greater chance of producing a negative return. Knowing how tolerant you are of risk may help determine which options are best for you in your own circumstances.

The amount of time your super will be invested can also help determine which investment options are best for you. For some people who are nearing retirement age, they may choose to protect their savings by investing in lower risk options, whereas someone who has many years before retirement may choose to invest in higher risk investments, as short term fluctuations may have less impact.

Talk to a financial adviser about which option is right for you based on your personal expectations and life stage or contact your super fund for a product disclosure statement.