Why super is the best way to save

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There’s no denying that 2022 has been a challenging year for many Australians, especially homeowners. Eight consecutive months of interest rate rises means mortgage holders are spending hundreds – and even thousands – more on their repayments every month. With inflation also surging, more people are looking for smart ways to save. Here’s why superannuation is a favourable option.

Super ranks as a top savings refuge

After years of historically low interest rates, we’ve been hit by an unstoppable rise in the cost of living as well as multiple cash rate rises. So where have Australians turned to help them stop the rot and plan for a more comfortable future? Superannuation.

According to a recent survey of more than 1,000 Australians, super ranked as the second-best place to hold their money – second only to high-interest savings accounts, which makes sense given the amount of cash rate rises this year.

That means everyday people are turning to their super as one of their preferred savings refuges – more so than investment properties, shares, crypto, overseas investments, and managed funds.

How to add value to your SMSF portfolio

When it comes to controlling your financial future, there’s no better way to do that than by setting up a self-managed super fund. In addition to saving for a comfortable retirement, an SMSF gives you much greater control over how you invest and acquire wealth. Here are some ways you can take advantage of the current economic climate to build a more robust SMSF.

Property

Property investing is a popular reason for Australians to get an SMSF, although you will need to comply with several rules. While you can’t live in the property when you are still working, it can provide a range of borrowing and tax benefits while also setting you up with a retirement property for when you do eventually hang up your work boots.

Annual contributions

You can take advantage of generous concessional and non-concessional contribution limits with an SMSF. If you have a profitable year or make a significant sale, such as selling a business, then you can beef up the amount in your SMSF so long as you comply with the age and balance limits. For example, if you are under 67 and the fund’s balance is less than $1.7 million, you can contribute up to three times the value of the non-concessional cap in a single financial year, which amounts to $330,000 (source).

Diversifying your investments

Rather than relying on a fund manager to invest your super however they like, with a self-managed super fund you can diversify your investment portfolio as much or as little as you like. Whether that’s in property, shares, overseas investments or cash, the choice is yours! It also gives you the freedom to invest according to your personal values, which can be beneficial if you are interested in eco-friendly or socially conscious investments.

Grow your wealth through super

If you are unsure how to fully maximise the savings potential of your superannuation, it’s worth speaking to an expert who can help guide you through potential investment opportunities and other strategies for accumulating more wealth.

“Setting up a self-managed super fund is one of the best ways to futureproof your finances and take total control of your investment decisions,” says Daran Thomson, Managing Director at Hallmark Consulting. “Especially in the current economic climate, it’s no wonder more Australians are turning to their super as a way to hold money in the face of rising inflation and interest rates.”

Want to get more from your superannuation or need help setting up a self-managed super fund? The experts at Hallmark Consulting can support you through the entire process. Contact us today or call 1300 135 295 to learn more about the benefits of having an SMSF.