The Motley Fool

How to decide on your superannuation asset allocation

Superannuation, or “super”, can seem simple on the surface but can quickly get complicated for the average Australian.

While your super account could well be your best friend as a Foolish investor, it’s not as if your super can just magically build that retirement nest egg on its own.

So, how can you decide on your asset allocations for your super account and where do we start the process?

Why is everyone talking about super?

The Aussie self-funded retirement system has been under the spotlight recently, with parts of the Federal Government looking to scrap the planned increase in the Superannuation Guarantee. 

The guarantee stipulates that employers must pay the set percentage (currently 9.5%) of an employee’s wages into their super account, and is currently slated to increase steadily towards 12% per annum by FY2026.

While there are no suggestions of changes just yet, it’s always worth keeping an eye on potential regulatory changes to super given it is a significant downside of the system with your money locked away until the preservation age (currently 60 years of age).

How to allocate your superannuation assets?

Before diving into asset allocation, it’s worth pointing out that asset allocation in any portfolio, super or otherwise, is purely individual and will vary for each and every Fool.

It’s important to ensure you’re clear on your investment goals and horizons, as well as any tax implications, which is where a good accountant or financial advisor can be worth their weight in gold.

Many of Australia’s industry super funds have performed strongly in recent times and often allow investors to either choose their asset allocations within various assets (i.e. property, Australian shares, international shares etc) or choose their balanced fund strategy.

While this doesn’t provide you with the flexibility to invest directly in the likes of Appen Ltd  (ASX: APX) or Magellan Financial Group Ltd  (ASX: MFG), these allocations can help you gain more control over your individual portfolio to suit your preferences.

For those investors who fancy a more tailored experience, a self-managed super fund (SMSF) could be worth looking at for complete control over asset allocation and security selection, meaning you could be loading up on top ASX stocks like Commonwealth Bank of Australia Ltd  (ASX: CBA) to buy and hold until retirement.

SMSF structuring is a complicated business and needs to be done carefully, preferably with the assistance of an accredited SMSF advisor – meaning you can get back to investing in those top ASX shares you love the most.

The Motley Fool’s #1 BANK STOCK for 2019

BRAND NEW! For a limited time, The Motley Fool Australia is giving away an urgent new investment report with all the details on our #1 BANK STOCK for the next 12 months and beyond…

Now, if you’ve been around this site for any length of time, you know The Motley Fool usually shuns bank shares.

But we’ve recently discovered a ‘hidden in plain sight’ bank stock with what we think is mouth-watering potential.

With the company boasting nearly 25% net profit growth every year for the last 5 YEARS…

And the shares paying a fully franked dividend that beats the pants off term deposits!

So if you like steady, high-growth income plays – we’ve got you covered!

You’re invited. Simply click the link below to discover our #1 ASX bank stock to profit in 2019. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.


Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.