If you’ve been financially affected by COVID-19, you have until 31 December 2020 to access your super early. But is it the right choice for you? And by you, we mean present and future you?
If you’re like most Australians who have been impacted by COVID-19 you’ve probably re-evaluated many aspects of your life. But more often than not, super isn’t one of those aspects.
That’s because many Australians are focused on their immediate situation, and rightly so. No one wants to live with empty pockets, not knowing what tomorrow might look like.
But you also need to think about your long-term situation, to take care of future you. Because unless it’s your last resort, accessing your super early might not be a good idea.
Why you might access your super early
Everyone’s situation is unique, so there are many reasons why you might want to access your super early. The question is, is this the best option for you? Accessing your super should probably be down the bottom of your to-do list when it comes to managing your immediate financial situation, but some reasons to access your super early might be:
- to keep a roof over your head
- to provide for your family
- to create an emergency fund
What you can access
If you’re experiencing financial difficulties you may be eligible to access up to $10,000 of your super between now and December. This decision should not be lightly made, so what are the kinds of things you’ll need to consider before you make it?
Some of the pros and cons of accessing your super early are discussed below.
The pros of accessing your super early
- It may help you stay on top of things without needing to incur debt
- People accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink and Veterans’ Affairs payments, or the JobKeeper Payment
The cons of accessing your super early
- It may result in you having less to retire on, especially if you’re younger
- Your super fund may be realising assets at a reduced value due to the market downturn, which may also affect the fund and its future returns
- You'll have less left in your super fund meaning you may miss out on opportunities for financial gains from future market recovery
- Any insurance cover you might have through your super could be affected or cancelled if your balance is too low
Your other options
Accessing your super early and affecting your future self should be a last resort. You may wish to consider what other financial relief options are available before you seek early access to your super.
There may be other ways, more appropriate to your situation, which may help you to get back on your feet without creating a problem for yourself in the future.
Learn about the assistance ANZ may be able to provide you by visiting our COVID-19 Support Hub.
See what financial support the Federal Government is providing by visiting the Economic Response to the Coronavirus page from the Treasury.
Well, there’s no one-size-fits-all answer. You need to make the best decision for you and your individual situation. If you’re still unsure of what to do, don’t worry, you’re not alone. It’s a tricky one.
If you’d like to learn more about ANZ’s assistance options, book a remote appointment with your local branch or visit us in branch.