Debt Reduction v Super

Objective: 

Provide insight into the benefit of paying down debt versus contributing to superannuation. 

Suitable for: 

Pre-retirees with existing debt and excess cash flow. 

Key features:

• Multiple debts can be considered. 

•  Optimises over multiple years rather than year by year. This ensures the true optimal outcome as the model is able to look at future changes to contribution caps, retirement date, changes in income etc. 

• Calculates the optimal mix of debt repayment and super contributions as opposed to just calculating the impact of 1 or the other. 

• The optimal contribution type is considered. 

Results:

• The net equity position of each strategy is compared, as well as the optimal combination of debt and superannuation contributions. Breakeven points for both interest rate and superannuation growth rates are provided.  

• Detailed results provides the year by year breakdown and recommended contribution type analysis.