For many hardworking Australians struggling to save a deposit to purchase a home, the idea that it’s possible to utilise your super to do this often comes as a bit of a surprise.
Most wonder why they have not heard about it before, while others are skeptical and think it must be too good to be true!
For those who question the strategy, the main point of contention is often centered around a lack of understanding about exactly how your super is used. To be clear, you can not generally withdraw your super and use it to pay for a deposit—but you can leverage your super to create a deposit.
Leveraging your super to purchase a home to live in, can be a really effective strategy to get you out of the rental trap and into your own home sooner. So, to find out more about the difference between leveraging your super vs. spending it and to learn if this could be an effective investment strategy for you, read on.
Spending your super vs. leveraging it
Utilising your super to access a deposit is not about withdrawing your funds and using them as a deposit—it’s about leveraging them to create one. This means you are not spending your super before your retirement, you are investing it—and when done strategically, this provides you with the leverage you need to access a loan to use for your house deposit.
How does leveraging your super work?
One way to leverage your super is to set up a self-managed super fund (SMSF) and switch some (or all) of your super balance there. With an SMSF you get to choose how you invest your funds, which means you can opt to invest in property. You can see how we helped single mum Tammy leverage her super to build a new home doing exactly that in our case study here.
If this seems a good fit you can attend our online education presentation where you’ll learn about your investment options within an SMSF, including the opportunity via our Home Buyer Accelerator Program to work with our team and create a 20% deposit for a home through our exclusive second tier lenders.
Who is eligible to set up an SMSF?
As long as you follow the rules in how you set up and manage the fund, almost anyone can have an SMSF in Australia. To utilise our Home Buyer Accelerator Program, we recommend you have a minimum balance of $200,000 in your super (either individually or with up to 3 other members of your friends or family). When you switch your super and work with us, you’ll get the benefit of a team of experts working behind the scenes to manage your fund—and because we take care of all the admin, planning and strategy to make your SMSF a success, we call it an ‘SMMSF’ ( a self-managed ‘managed’ super fund).
Is this the right strategy for you?
To discover if switching to an SMSF and creating a home deposit by leveraging your super is the right option for you, the first step is to complete our short, 1-min online quiz to find out if you qualify. From there, you can attend our free educational training to learn more.
Feel free to get in touch if you have any questions. We can’t wait to help you get off the rental cycle and into your own home sooner!
