How clients can add $100,000 to super

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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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  • Mark on 13/08/2013 5:12:49 PM

    If they had bought commonwealth Bank shares each year they would be even better off and could substantially reduce their mortgage now. Just another moronic thought bubble from the Union movement , sorry industry fund.

  • GAB on 13/08/2013 3:05:40 PM

    Never in 15 years in the job have I seen anyone invest their tax refund into super. I suppose if you could get some govt co-contribution, sure. But for the average younger family.....I can confidently say UNLIKELY. Would be better suited to just buying some blue chip fully franked shares overtime...or paying down the average family home loan of $400,000.

  • Innocent Observer on 13/08/2013 11:18:47 AM

    I'm sure he means well but...
    (1) given the level of household indebtedness, in nearly every case it's going to be a better option to pay down non-deductible debt
    (2) if you were to contribute it to super, why the heck wouldn't he make reference to looking at concessional contributions
    (3) 7% p.a.... hmmm, maybe a history lesson's in order. That 7% is around 8.2% pre-tax, then add fees and you need 9% p.a.+ to be talking from the same page (diversification, anyone?)
    (4) Inflation is ignored.
    (5) Most importantly, skipping the holiday to Fiji... Now I know how the numbers work, but sometimes a reality check is in order. An annual holiday with the family now is likely to add more value and satisfaction to one's life than in 35 years when health may not afford the ability to holiday. How many of us have clients who in the rush to save for a rainy day missed out on every sunny one? (Remember, no one cares it you're the richest guy in the graveyard)

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