Home' SA 50s Lifestyle : SA 50s Summer 10 11 Contents 14 Summer 2010
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Making the most of a tax refund
If you are fortunate enough to
have received a tax refund from
the 2009/10 financial year, have
you thought about how you could
actually make this lump sum of
money work harder for you?
Naturally, the first thing people think
of when they learn they are going
to receive a tax refund is how they
could spend it. However, it pays
to stop and think before splurging
and consider how this extra
cash – money that you’ve earned
throughout the year – could improve
your financial situation.
Following are a few suggestions on
what people could do with a tax
refund, no matter how large or small:
Use some or all of the refund to
make an after tax contribution to
super if you are eligible to receive
the Government’s Co-Contribution.
Effectively, this represents a 100
percent return on your money.
Reduce or clear your debts. With
interest rates on credit cards being
up to 20 percent per annum, this
is a terrific opportunity to save
money in interest and help you get
in front for the new financial year.
Likewise, with personal loans being
on average around 10-14 percent
per annum, pay down or pay off any
personal non-deductible loans.
If your spouse earns less than
$13,800 pa or is not working at all,
making a contribution into super on
their behalf of up to $3000 may get
you a tax offset of 18 percent of the
contribution (up to a maximum of
$540) on your tax return next year.
Bank the money and use it as cash
flow and, instead, salary sacrifice
some of your taxable income to
super. If your income is more than
$37,000 pa, you will save around
16.5 percent in tax by salary
Make a lump sum payment off
of your mortgage. Once again,
reducing any non-deductible debt is
a great way to save yourself money
in interest and help you to pay your
loan of f sooner.
Consider investing the funds.
Whether this be managed funds,
shares or term deposits, putting
the money away and treating it
like you never received it will help
you save towards a nest egg such
as a future holiday, a deposit for a
home or maybe your children’s or
The key is not to just fritter your tax
return away – review your financial
goals and put this bonus to good
It is also worthwhile seeking advice
from a qualified financial planner on
the best way to use your tax refund
to ensure that this extra money
in your hand is used in the most
appropriate way given your personal
situation and goals.
*Darren James is an Authorised
Representative of AMP Financial
Planning Pty Ltd, ABN 89 051 208
327, AFS Licence No. 232706.
Any advice given is general only
and has not taken into account
your objectives, financial situation
or needs. Because of this, before
acting on any advice, you should
consult a financial planner to
consider how appropriate the advice
is to your objectives, financial
situation and needs
by AMP Financial Planner Mark Borg of MBA Financial Strategists
Planning for your retirement: it’s not just money and super
You may be nearing that “magical”
time in your life – the time for which
you have worked so hard for so
many years. Yes, your retirement
days are finally here!
On average, people are spending
around 20 years at school, technical
colleges or other education
institutions; 35 years working; and
20 years in retirement.
You have been looking forward to
this for so long and you deserve the
best, so there is a very real need to
plan for your years in retirement in
order to make the most of this time.
Evidence shows that if you come into
retirement as healthy as possible,
you are more likely to stay that way.
Evidence also shows that if you plan
for major events, such as retiring,
they are more likely to happen and
work out well.
You should start to plan for
retirement at around 35 years, if not
earlier. But if this is not quite your
age, it really is never too late to start.
In putting your plan together you
first need to think about the bigger
picture on retirement - planning
for retirement is not just about
money and superannuation. While
these two things do help to make
retirement years easier, a good
starting point might be to ask
yourself these questions:
• What do you want from your
• What have you done already to
help make these things happen?
• Who will replace your workmates
when you need someone to share
your joys and frustrations?
• What do you think you need to do
to achieve this in your retirement?
Does your retirement plan include:
• Stopping smoking – this is a main
preventable cause of ill health;
• Finding more ways to be active
physically – this is the second
most preventable cause of ill
• Continuing work – go part time or
be a volunteer. Evidence shows
work is good for your health.
• Enjoying healthy foods;
• Having a healthy weight;
• A yearly health check.
Remember, your future is not just
about what you are retiring from,
but what you are retiring to. Take
the time to look at all aspects of
your life that will be affected by your
retirement. It is an important time,
so prepare well, not just financially
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