How to decide if accessing early super is right for you

In March this year, the Government announced a series of initiatives for Australians who have been financially impacted by the COVID-19 crisis. One of the temporary measures introduced for individuals is the early access of up to $10,000 of your superannuation (super) in 2019-20 and a further $10,000 in 2020-21.

Before even considering whether this is right for you, you need to check whether you are eligible:

Open to Australian and New Zealand citizens and permanent residents who:

  • Are unemployed
  • Are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance
  • Were made redundant, had reduced working hours by 20 per cent or more or
    sole traders that had a reduction in their business turnover of 20 per cent or more after 1 January 2020.

If you’re eligible, here are some things to consider to help you work out if you should access early super or not:

  • Do I need funds immediately to pay for basic costs of living (rent, food, bills, living, etc)?
  • Do I need a monetary buffer to cover basic of costs of living (rent, food, bills, living, etc) for the next 6 months?
  • Do I want to use the money to fund other financial goals to improve my financial position such as purchasing an investment property?

How will it affect my retirement?

There are various ways withdrawing lump sums of money from your superannuation can affect your retirement. Here are a couple examples:

  • If you have enough cash within your superannuation, taking it out won’t make a huge difference (as long as you can pay it back). You may also miss out on opportunities to invest into other assets such as shares at a time where there is maximum opportunity.
  • If you do not have cash within your superannuation, you will be taking the funds from investments at a low point in the market. The $10,000 you withdraw may have been $20,000 just a few months ago and may well be valued higher again in the not-too-distant future. Taking into account compounding interest and the number of years until you retire, that $10,000 could easily become $100,000 over time. It will have a significant impact on your retirement savings if you can’t pay it back quickly.

The bottom line is you need to be able to pay back your retirement or there could be immense losses that could impact your quality of living in retirement.

You should consider talking to a financial planning expert to understand the implications of withdrawing this lump sum from your superannuation on your individual circumstances and whether or not it is the best option. Making a big decision that is wrong for you could have consequences lasting for many years.

A CFP® professional is a financial planner that can help you by taking the time to understand who you are, what you need and providing options to empower you to make the decision best for your retirement needs.

Uncertain times call for certain advice.


A CERTIFIED FINANCIAL PLANNER® professional is internationally recognised for the highest education and ethical standards in financial planning. If you need help through uncertain times, ask a CFP® professional for financial advice. Want to find out more about what a CFP professional can do for you? Find out more here.


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