Should I pay off my mortgage or top up my super?
A lot of people think they should be putting all of their surplus into paying off their family home.
But there are definitely benefits to contributing your surplus into either, or both of your mortgage and super.
In this low interest rate environment, there is a compelling argument to put extra money into super instead of your mortgage.
This is because your money in super can earn a high return and any earnings inside super are only taxed at 15%.
When you retire, there is a scope to take money out of super to pay off your mortgage instead, or even maintain your debt and continue investing.
From experience, we have found that maximizing your super is generally better as it is a more tax-effective use of your cash flow.
Although, there are benefits in either option and what you choose to do will depend on your personal objectives, financial situation and needs.
If you make additional mortgage payments, this could help you cut years off loan terms and save a lot of interest.
Whereas if you make additional super contributions, this could help you use cash flow more tax-effectively and boost your retirement savings.