Use tax refund to turbo charge super savings, says ASFA

Australians are being encouraged to boost their retirement savings with their tax refunds.

The Association of Superannuation Funds of Australia (ASFA) said people could turbo charge their tax refund by contributing to super.

“As tempting as it can be to splurge your tax refund on short-term indulgences, it really makes sense to set it aside for your future, via super,” said ASFA CEO Dr Martin Fahy.

“You’ll get a better return on your tax return.”

ASFA said that the median tax refund was around $1,400 and estimates that a person aged 35 putting a tax refund of this amount into super each year would have an extra $65,000 at age 67.

Most individuals not lodging through a tax agent would have had a due date to lodge their 2016/17 return by 31 October 2017. Around 80% of individuals lodging a tax return receive a refund, according to ASFA. The organisation said this provides an opportunity to boost retirement savings, by benefiting from compound interest.

ASFA, noting the recent changes allowing more individuals to claim tax deductions for super contributions, said: “It makes sense to ‘double up’ with your tax refund and make a tax deductible contribution to your superannuation fund.”

“So consider turbo charging your tax refund to provide a better retirement lifestyle for yourself,” said ASFA.

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