Retirement
Use cash handouts before touching super, industry body warns
Australians are being urged to think twice before accessing their super early in the current economic climate, with analysis revealing the average person stands to lose up to $120,000 from their retirement nest egg.
Use cash handouts before touching super, industry body warns
Australians are being urged to think twice before accessing their super early in the current economic climate, with analysis revealing the average person stands to lose up to $120,000 from their retirement nest egg.
Industry Super Australia (ISA) has indicated that while it will work to ensure members under severe financial stress due to the economic impacts of the coronavirus will have access to their super in line with the government’s recently announced early access scheme, it must be approached “with extreme caution”.
Acknowledging that the COVID-19 pandemic has created extraordinary times, ISA said it acknowledges the government’s need to take the extraordinary measure of loosening the restrictions on early access to superannuation as part of its financial support package.
“But accessing superannuation early should be approached with extreme caution and only as a last resort,” it flagged.
It follows the comments of Australian Institute of Superannuation Trustees CEO Eva Scheerlinck yesterday, who also called for caution to be applied by financially stressed Australians considering accessing their super.
ISA highlighted the significant program of wage stimulus measures, including an increase to welfare support payments, that it has asked members to consider exhausting before tapping into their super.
The super body said its own analysis showed that “a 20-year-old who accesses the full $20,000 available under the scheme could lose more than $120,000 from their retirement balance”.
Similarly, a 30-year-old who accesses $20,000 from super now could lose about $100,000 when they hit retirement and a 40-year-old could lose more than $63,000.
ISA chief executive Bernie Dean acknowledged that a number of super fund members have lost their jobs or had their hours dramatically reduced.
“Industry super funds will do all they can to help them.”
“But members should tread carefully and only think about cracking open their super after they’ve taken up the extra cash support on offer from the government – super should be the last resort given the impact it can have on your retirement nest egg,” he explained.
“Members need to know that taking your super now is like selling a house at the bottom of the market – you’ll lose money you would probably have clawed back overtime.”
Despite its misgivings, ISA said it will work with the government on the “all-important detail” of how the scheme can be rolled out to prevent unintended impacts on a member’s savings and their super fund.
RELATED ARTICLES
About the author
About the author
Self managed super fund
Superannuation guarantee to be paid on government paid parental leave, says ASFA
The Association of Superannuation Funds of Australia (ASFA) has hailed the government's decision to include Superannuation Guarantee payments with its Paid Parental Leave policy as a critical step ...Read more
Self managed super fund
SMSF experts advise against hasty reactions to potential super tax changes
As the Australian Government proposes a new tax measure on superannuation earnings for balances exceeding $3 million, experts from the self-managed super funds (SMSF) sector are urging members not to ...Read more
Self managed super fund
Federal government announces changes to superannuation contribution caps
The Federal Government has announced changes to the superannuation contribution caps, impacting self-managed super funds (SMSFs) and their members from 1 July 2024. Read more
Self managed super fund
SMSF Association calls for joint effort to tackle early super access
The SMSF Association is calling on a collaborative approach including the Government, the Australian Taxation Office (ATO), the Australian Securities and Investments Commission (ASIC), and the ...Read more
Self managed super fund
Rest Super members file class action over alleged insurance premium deductions
Shine Lawyers has initiated a class action lawsuit against Rest Superannuation (Rest), alleging the unlawful deduction of income protection insurance premiums from members' superannuation accounts. Read more
Self managed super fund
Debunking a superannuation tax myth: SMSF Association clarifies the impact on Aussie farms
In the ongoing debate about a proposed new tax targeting superannuation funds exceeding $3 million, the SMSF Association has stepped in to challenge claims from the Association of Superannuation Funds ...Read more
Self managed super fund
Is an SMSF right for you?
When it comes to planning for retirement, one of the most significant decisions Australians have to make is how to manage their superannuation. Read more
Self managed super fund
SMSF growth continues after pandemic peak
The statistics have begun to change coming out of the COVID-19 pandemic, according to new findings from Australian Investment Exchange Limited (AUSIEX). Read more
Self managed super fund
Superannuation guarantee to be paid on government paid parental leave, says ASFA
The Association of Superannuation Funds of Australia (ASFA) has hailed the government's decision to include Superannuation Guarantee payments with its Paid Parental Leave policy as a critical step ...Read more
Self managed super fund
SMSF experts advise against hasty reactions to potential super tax changes
As the Australian Government proposes a new tax measure on superannuation earnings for balances exceeding $3 million, experts from the self-managed super funds (SMSF) sector are urging members not to ...Read more
Self managed super fund
Federal government announces changes to superannuation contribution caps
The Federal Government has announced changes to the superannuation contribution caps, impacting self-managed super funds (SMSFs) and their members from 1 July 2024. Read more
Self managed super fund
SMSF Association calls for joint effort to tackle early super access
The SMSF Association is calling on a collaborative approach including the Government, the Australian Taxation Office (ATO), the Australian Securities and Investments Commission (ASIC), and the ...Read more
Self managed super fund
Rest Super members file class action over alleged insurance premium deductions
Shine Lawyers has initiated a class action lawsuit against Rest Superannuation (Rest), alleging the unlawful deduction of income protection insurance premiums from members' superannuation accounts. Read more
Self managed super fund
Debunking a superannuation tax myth: SMSF Association clarifies the impact on Aussie farms
In the ongoing debate about a proposed new tax targeting superannuation funds exceeding $3 million, the SMSF Association has stepped in to challenge claims from the Association of Superannuation Funds ...Read more
Self managed super fund
Is an SMSF right for you?
When it comes to planning for retirement, one of the most significant decisions Australians have to make is how to manage their superannuation. Read more
Self managed super fund
SMSF growth continues after pandemic peak
The statistics have begun to change coming out of the COVID-19 pandemic, according to new findings from Australian Investment Exchange Limited (AUSIEX). Read more
