Use tax refunds for superannuation
Australians should consider using a portion of any tax refunds they receive this year to contribute to superannuation, according to industry super fund Club Plus Super.
The fund has referenced research suggesting that if half of the average tax refund of a 30-year-old was invested into the average default fund as a one-off payment, it could be worth approximately $12,791 by the time the contributor turns 65.
Club Plus Super chief executive Paul Cahill said that figure related to half of one year's tax refund but if individuals used the same strategy for a decade, it might equate to a future return closer to $100,000.
"While it's easier said than done to invest half of one's refund, the reality is that most Australians won't have the money they need for a comfortable retirement, so tax refunds could prove to be very valuable in addressing this problem," he said.
He said that recent independent research commissioned by Club Plus Super suggested that most Australians weren't making extra contributions to their superannuation and that of the 843 fund members surveyed, more than half of the respondents understood how much money they would need at retirement age in order to meet their lifestyle goals (51.6 per cent), but only-one third of respondents (32.1 per cent) said they were making extra contributions to their super fund.
"The average tax refund might buy a nice holiday to Fiji this year but if invested and left for 35 years - it could not only buy a trip around the world but even more importantly, a better standard of living and access to healthcare in retirement," Cahill said.
Originally published by SMSF Essentials.
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