‘Is it too risky to place all of our assets into our superannuation?’

Dec 06, 2018
There's risk inherent in every investment, unusually commensurate with the potential reward, and superannuation is no different. Source: Getty

Q. Is it best to place all our assets in superannuation or to diversify using other investments ? We currently have a number of rental properties and have been advised to sell one each year after we retire in three years time. Our adviser has said that we should put the proceeds into super, but are there risks to having everything in super?

A. It is important to realise that a superannuation fund is simply a vehicle or box that holds investments. The box has special rules which if followed, provide generous tax and sometimes Centrelink concessions. The performance of the fund and the attendant risk is actually determined by the investments inside the super fund.

That means that you are free to diversify your investments across shares, property and cash within the super fund itself. If you opt for a self-managed arrangement, you will have to make those decisions about where the money goes. If you opt for a public offer type scheme, someone else can do that for you although these days, there are funds that allow you a great deal of individual choice as well.

In reality, the biggest risk of using super as an investment vehicle is the possible change in rules that might affect access and the ability to make contributions in the future. To that end, it is probably a decision that is best made at the time you sell rather than locking in any arrangements three years out.

If you have a question for Starts at 60’s money experts, email it to [email protected]

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.

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