Accessing Super Before You Retire

IMPORTANT THINGS TO CONSIDER BEFORE DRAWING DOWN EARLY.

By now you would be aware of the government’s new temporary compassionate grounds for the early release of superannuation. So, what are the implications of accessing your super early and what do you need to consider?

A QUICK RECAP

The Federal Government’s Early access to superannuation, states that eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020 and up to a further $10,000 from 1 July 2020.

This is a great boost to your finances if you or your staff are unemployed and experiencing financial hardship due to the coronavirus. But super is a longterm investment strategy, so what are the implications of accessing it years before you are due to retire?

A NOTE OF CAUTION

Withdrawing money from your super after a major fall in investment markets can effectively ‘lock in’ the loss. It’s like selling your house while property prices are depressed –unless you really had to, you wouldn’t. We strongly recommend that you seek professional advice before accessing super savings earlier than at your retirement or changing investment options during periods of extreme volatility. It may have a significant impact on your ability to retire on your own terms.

OTHER IMPLICATIONS Low account balances

Be aware of the Government’s minimum account balance requirements if you decide to access funds from your super account. If your balance falls below $6,000 and you have not had an amount credited to your account for 16 months, you could have your account balance transferred to the ATO as part of laws to protect super balances from erosion by fees. If this occurs, they will attempt to transfer your money to your active super account.

Opt-in for Insurance cover

If your account has not received an amount for 16 months, you could lose any insurance you have unless you opt-in to continue to hold insurance. Contact your super provider for more information.

MANAGING DEBT

During these tough times many financial institutions are being flexible on their customers’ commitments. We recommend that you contact any institutions you owe money to and talk to them about any hardship programs they have in place.

BEWARE OF SCAMS

Be cautious about any emails or calls you receive regarding early access to your super. Once early access to super becomes available, you will be able to apply through myGov directly. You shouldn't need a third party to assist with this and there is no fee to apply.

NEED MORE INFORMATION?

For more details, contact us or your local Member Services Manager.

Club Plus Super will provide regular updates on how we are responding to COVID-19 on our website or follow us on LinkedIn or Facebook.

USEFUL LINKS:

ATO’s early release of super Early access to superannuation