The end of the financial year most likely looks very different this year following the significant and far-reaching impacts of COVID-19 on our community.
While the end of the year marks tax return time, now is also a good time to review your finances, get your debts under control, find new avenues to save on your spending and look to your long-term financial goals as well as ensure your super is working for you and your plans.
For those significantly financially impacted by COVID-19, you may have found yourself needing to access some of your super early and may again need to make this early withdrawal in the next financial year.
While super's primary role is to help people save for retirement, we recognise that for those significantly financially affected by COVID-19, accessing some of your super today may be an absolute necessity which outweighs the benefits of maintaining these savings until you finish working.
We would, however, urge all Tasmanians to view accessing their super early as the last resort, with the long-term loss of interest earnt on super totals potentially having a large impact on the amount of super savings you could have in retirement, especially for younger Tasmanians.
Now with the end of the financial year and the possibility of a small cash injection from your upcoming tax return, the time is right to make sure you're claiming all that you're eligible for to ensure you get the maximum return for your current employment situation.
In addition to your usual tax deductions, the Commonwealth Government has announced a range of extra working from home tax claims that you might be eligible for. The ATO has advised you can claim for electricity, heating, cooling, lighting and cleaning costs for the area you're using for work as well as phone, internet and home office equipment. If the cost is crucial to you doing your job from home and you have proof, then it should be claimable.
For more information about tax deductions for home office expenses, you can head to www.ato.gov.au.
The end of the financial year also marks an ideal time to take a few minutes to run through your super checklist including checking you have the right insurance for your circumstances, checking your balance and ensuring your contact details are up-to-date.
A few simple adjustments can make a big difference to the amount of money you'll end up within retirement.
For example, consider combining multiple super accounts to save fees, review your investment options, start automatic salary sacrifice contributions or make extra contributions to boost your nest egg.
In these uncertain times, planning and allocating what and how you use your tax return funds is more important than ever.
You may need to simply ensure your tax return is used to pay those essential bills to get you through these tough times.
Or if you recently accessed some of your super early and are now in a financial position to do so, you could use your return to increase your super payments to counteract these early withdrawals.
And if you do have some flexibility, you could also investigate ways you can use your tax return to help stimulate the local economy post-COVID-19 by holidaying at home and purchasing local produce and products.
Most importantly in these uncertain times, and with many of us spending much more time at home, let's make the most of this extra time indoors to review your finances and start the new financial year equipped with the strategies to rebuild and plan for your future financial goals.
- Wayne Davy, Tasplan chief executive. Tasplan is a state based profit-for-members super fund.