Q&A: What are the pros and cons of starting an account-based pension vs investing outside super?

Q: Should you put all your super into an account based pension or invest some in a fixed term deposit? What are the pros and cons? If you put some super into a fixed term deposit and then roll it over at the end of the term, will you then start paying tax on returns?

Of course, we can’t provide any personal recommendations here. What I’ll do is I’ll take you through the general issues to consider rather than specifics. It’s a difficult question to comment on because there is probably no single correct or single appropriate response. I hate saying it, but often it will depend. I’ll just start by saying this is something that will be different for all of us. I mean, there’s a whole lot of pros and cons for super, and there’s a whole lot of pros and cons for holding assets outside super.

Now, with the way this question is worded, the way I’m reading it is should we put all our retirement savings into an account-based pension or do we invest some outside of super in a fixed term deposit. That’s the way I’m reading it. Now, the reason I’m clarifying that is remember that with super funds nowadays, you can pretty much invest your super in anything that you can invest your non-super assets in.