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.
