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EOFY and it's that time of the year again where I think "oooh, what presents can I buy myself" only to be disappointed when I get next to nothing back anyway. But I really want one of these (I have an older model but the idea of detachable controllers like the Switch has me salivating) but can only justify the purchase if I get something decent back from the tax man.
I put money in to Super which I will claim as a tax deduction. So I will get a decent tax return, which I will put in to Super. And so get another tax return from it next year! The gift that keeps on giving.
Do you put your entire tax return into super? I'm starting to think I should boost my super now that I'll be staying in Australia for a while, and I've got years to catch up on.
I'm actually putting in more on a regular basis - I'm trying to max out the amount I can put in, including using up the unused amounts from past years. My income varies so I have a budget where the main expenses come out of the base pay, and everything that I earn above that is divided up on percentages, including extras like tax returns, interest payments and money from selling things on Marketplace. About half of that is going into Super, the rest is going to other savings goals.
It's definitely worth adding more to Super because of the tax benefits, and the sooner you do it the greater those benefits are. Not just the lower tax when you pay in, but the interest you earn in Super is also taxed at a lower rate, so the compounding effects of that make a huge difference on your eventual returns.
Thanks for explaining! I think I might start doing some of that rather than socking it all into a savings account. Even 10% is better than nothing.
You actually explained that really well. I find it hard to get my head around the details of that kind of thing and the language of finance is not my second language.
This is a good idea... part of me thinks that I want to enjoy things now (the pessimistic part that believes I'll never really access my super like the Boomers have/do), but I should also be sensible. Maybe I'll split the $3.50 that I'll get back haha.
That pessimism tends to become a self-fulfilling prophecy. It causes you to not put anything aside, putting you into the position where you really won't have much to access.
Depending on how long you have until you retire the things you give up now will be returned many times over - and 60 creeps up on you quicker than you expected. Definitely don't give up everything that makes you happy now, but look for a balance. If there a few things that are not that important to you now that you can skip the benefits in future will be worthwhile.