With the ASX back in full swing in 2020, you may be wondering how to set up your superannuation for the year ahead.
The new year is a good chance to re-evaluate your investments and position your portfolio appropriately.
Here's a few things to consider as you look at what you're holding and what you're not in 2020.
Growth versus dividend shares in your superannuation
Superannuation is a tax-advantaged account, which can have some huge benefits for your investments in 2020. As a general rule, you can get the most out of your super by holding investments that are taxed at a higher rate.
If you're in a high income bracket, it could be advantageous to "quarantine" some of your top ASX dividend shares like National Australia Bank (ASX: NAB) to reduce your tax bill.
However, you could keep growth shares like Afterpay Ltd (ASX: APT) outside of super. These aren't taxed the same as your dividend shares given they are "paper" returns.
As always, a qualified professional such as a tax accountant or financial adviser could be a real asset for optimising your superannuation in 2020.
Consider your superannuation assets in 2020
An extension on the above is to consider what you're holding in your superannuation in 2020.
If you're a young investor, your retirement timeline could easily be another 40 years away. That means your investments are likely to go through a number of ups and downs in the decades ahead.
A longer investment horizon usually equates to a higher ability to take on risk. If you've got the capacity and willingness to take on risk, your superannuation assets could be better off in high growth assets rather than cash or bonds.
However, if retirement is looming, you need to think carefully about your superannuation asset allocation in 2020.
Is a recession on the cards for 2020?
Unless you've been living under a rock, you've probably heard there is a recession coming for the last 5 years.
Lower interest rates and a property rebound are certainly helping in the short-term. While you might be tempted to cash out, the best investment returns have historically been right before a recession.
If you're worried about your superannuation assets in 2020, consult with a professional to put your mind at ease.
However you go about it, now is a great time to get your superannuation in shape for 2020.
