Clients are likely to be completing their tax returns now and weighing up how they’re going to spend the extra income.
Club Plus Super says that it is the ideal time for advisers to help clients give their super a boost.
By assuming that half the average tax return of a 30 year old was invested and earned 7% per annum, the super fund found that it could be worth approximately $12,791 when the contributor was 65. The average refund for the 2010/11 financial year was $2,396, according to the fund’s figures from ATO.
“That figure relates to investing half of one year’s tax refund but if individuals used this strategy for a decade, it may equate to a future return closer to $100,000,” said CEO of Club Plus Super, Paul Cahill.
“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.”
Cahill says that investing the extra money could stop someone going on holiday to Fiji this year, but could buy them a trip around the world in 35 years. It will also mean a better standard of living and access to healthcare in retirement.
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