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

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.

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IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.