My financial adviser has always said that it is important to pay down any debt and take advantage of any tax concessions from putting money in my superannuation. However, there is a healthy argument to be made whether it is better to maximise any deductible super contribution to reduce tax, and hopefully, receive a higher return from superannuation on retirement, or place surplus money into paying off a home mortgage.
Debt always presents a higher risk if you cannot work and earn money. In addition, when mortgage repayments are not met, the banks get upset. So it is always beneficial to reduce debt as quickly as possible. My wife and I currently have a small mortgage due to the recent home renovations, so the plan is to pay that debt off in the next six months. Once that debt is paid off, our strategy will include adding more money to our superannuation, maximising the tax-deductible contributions each can make.
Having enough money to retire is essential for us. So, following the recommendations of our financial advisor to reduce debt and add money into superannuation appear to be prudent and should afford us a comfortable lifestyle in the future.
Debt always presents a higher risk if you cannot work and earn money. In addition, when mortgage repayments are not met, the banks get upset. So it is always beneficial to reduce debt as quickly as possible. My wife and I currently have a small mortgage due to the recent home renovations, so the plan is to pay that debt off in the next six months. Once that debt is paid off, our strategy will include adding more money to our superannuation, maximising the tax-deductible contributions each can make.
Having enough money to retire is essential for us. So, following the recommendations of our financial advisor to reduce debt and add money into superannuation appear to be prudent and should afford us a comfortable lifestyle in the future.