Is it too risky to place all of your assets into your superannuation?

Is it best to place all your 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?

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.

Thinking about where to place all your assets? This is one of the big decisions you will have to make that will greatly affect your finances. Talk with our Centra Wealth experts to help you plan and decide where to best place your assets while making sure we help you reach your financial goals. Give us a call at (08) 8231 4709 or you may also reach us at info@centrawealth.com.au.

by MONEY EXPERT Nick Bruining
Article reproduced from Startsat60.

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Zac Zacharia (Managing Director) has been assisting clients to create wealth and secure their futures for over 14 years.

He is also an accomplished presenter and educator

Co-authoring the popular investment book, Property vs Shares.