What Are You Doing With Your Extra Tax Money This Year?
The beginning of a new financial year meant the beginning of new tax cuts. Most Australians are bringing home an extra $600 a year per income below $70,000. If you have a double income household, that’s $1,200 a year, or $100 a month. That doesn’t sound like a lot of money, but I bet you’ve already found a way to spend some of it.
A recent study in Hindu, India concluded that Australians are at the top of the list of the world’s countries with the fewest people saving for retirement beyond government supported programs. Don’t be one of those Aussies who isn’t ready when the time comes. Use that extra tax income to sock away for your retirement years. Set up an online savings account or another high interest savings and have that extra portion of your paychecks deposited directly into it. Then forget about it. You didn’t have that money last year, you won’t miss it this year while it sits in your high interest savings or online savings account.
An online savings and a high interest savings account can differ in some ways, but all accounts have their perks and their restrictions. Look into both online savings and high interest savings plans and see which one will bring you the most rewards by the time you retire. Don’t worry that the high interest savings rate goes down if you take money out. Don’t be concerned that online savings accounts are fairly new to the game. Online savings accounts may be new but they have been tried and tested and are very reliable. High interest savings penalties for early withdrawals shouldn’t be a concern unless you plan to retire within the next year.
Here are the questions you should ask. Is the interest rate constantly fluctuating or is it fixed for a long period of time? How long do I have until I retire and which type of high interest or online savings account will bring me the highest returns after that amount of time? Put that extra money away for later years when you will need it the most.