Baby bonus could be mum’s super
If young mothers invested the new Government baby bonus into super it could provide a handsome retirement plan, according to Norwich Union.
If the annual maximum $2,500 claim were invested in a superannuation plan every year for five years, it would build up into a “handsome nest egg”, Norwich says. Women spend 17 years less in the workforce than men, on average, due to child-rearing. Men are in the workforce for an average 39 years. Because of this disparity, women are much more likely to have inadequate retirement savings.
The $2,500 invested in a superannuation plan for the first five years of a child's life would build up to $94,000 over 35 years. Norwich’s Marc Mengler says that the new baby bonus is something young parents were not expecting, so can be seen as a real bonus. If the money is committed to superannuation it will be of great benefit to women later in life.
For more information on the baby bonus, consult the Australian Taxation Office web site: www.ato.gov.au.