March 24, 2016
Property is not your only 'nest egg' worth protecting
Take a look at our financial tips to help you protect your home and superannuation this Easter.
For many Australians, the Easter long weekend is a great opportunity to have some much needed down time.
But with interest rates still sitting at historical lows, and ongoing speculation that superannuation changes are ahead - the Easter long weekend is a great time for borrowers to set aside some time to focus on their current financial situation and look at ways to protect their nest egg for the future.
One 'nest egg' that Australians should be focusing on this Easter long weekend is their property.
With interest rates at record lows, there has never been a better time for homeowners to pay down their property debt. By making extra home loan contributions, borrowers can reduce the interest they will pay on their loan, as well as helping them to own their property and improve their financial situation faster.
However, property is not the only nest egg Australians should be looking at protecting this Easter.
It is also important for Australians to review their broader financial situation - including their superannuation - on a regular basis. Because at the end of the day, your superannuation is the money you will live on during retirement, so it is important that you take the appropriate steps to give your super a boost.
If you are looking to use the Easter long weekend to review your financial situation and make sure your nest egg - including your home and superannuation - is not only well-protected, but has the ability to grow and flourish, then take a look at our following tips to help you protect your nest eggs:
Overpay your mortgage
One of the best ways you can protect your home is to pay off your debt faster. And, with interest rates currently sitting at record lows, now is the perfect time to contribute extra repayments to your mortgage. By contributing an extra $100 a month, you can not only save thousands of dollars in interest over the life of your loan, but it can also significantly slash the loan term period. Even making one-off additional repayments can make a huge difference to the length and overall cost of your home loan.
Give your super a boost
In addition to overpaying your mortgage where possible, making salary sacrificed super contributions can offer a simple way to save on tax and build wealth. Salary sacrified super contributions allows part of your before-tax salary into your super rather than taking the money as cash in hand. These contributions are taxed at 15%, which is likely to be below the marginal tax rate (which could be as high as 46.5%), so more money goes towards growing your super rather than paying the tax man. Up to $25,000 annually can be added to super through pre-tax contributions ($35,000 if aged 60-plus). This limit includes an employer's compulsory contributions.
Insure major assets
Finally, given that your income is your biggest asset, it makes sense to protect it. While the majority of superannuation funds offer some level of income protection cover, this cover is often not enough. It is important to do your due diligence and make sure whatever income protection insurance you currently have is adequate. If it isn't, it is vital that you do something about it, before it is too late.
In the same way that it is important to properly insure your vehicle in the event that unexpected circumstances arise, it is also vital to properly insure your income.
Over this Easter long weekend, I recommend taking some time to review your current financial situation and perhaps re-assess your short and long-term goals. At Mortgage Choice Armadale & Byford, we have an amazing team of mortgage brokers and a financial adviser that can help make your money work harder and ultimately help you to achieve your financial goals sooner.
Call our team at Mortgage Choice Armadale & Byford on (08) 9485 0090 to secure your financial future today.
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