A certified financial planner from Dubbo says people considering accessing their super early should carefully weigh up their options as new analysis estimates almost 500,000 Australians have emptied their nest eggs.
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In March the government moved to allow people who had lost their jobs or had hours reduced because of the COVID-19 pandemic to access $10,000 in super and a further $10,000 from July 1.
New analysis from Industry Super Australia (ISA) estimates 395,000 people under the age of 35 had eroded their super balance.
About 480,000 Australians across all age groups could have wiped out their super even before the second tranche opens, the ISA estimates.
Certified financial planner Joel Bones, director of IEC Financial Advisory, said his office had received some inquiries about the scheme, but not "a large volume".
"Generally the inquiries have come from people who are not existing clients, and who have already decided they want to access their super using the scheme, and are asking about practical aspects of how to actually do that," he said.
Mr Bones urged caution.
"The reality is this is actually a big decision for people to make, and rather than seeing it as an opportunity for some easy cash, there are a lot of important things people should consider around this," he said.
The director offered a few suggestions, including that people document and retain evidence that they actually met the criteria for the early access. The Australian Taxation Office had indicated it would follow up individuals to ensure they did satisfy the criteria, Mr Bones said.
Secondly, people should consider if they really needed the funds to live, and if there was another way to make do financially, he said.
"As the recent report from Industry Super Australia indicates, projections show a 25-year-old taking $10,000 from their super now, could mean they have $49,000 less in retirement," he said.
"That could mean, again looking at current averages, one less year of income in retirement."
Mr Bones also urged people to consider other implications, including their existing super account being emptied or closed due to the withdrawal being made, and if they might lose other benefits due to this, such as life insurance they held through that account.
"This might create a large risk for your family and loved ones if something happened to you after the account is closed," he said.
Faye Wheeler
I have been a journalist for more than a decade and in that time I have been keeping Daily Liberal readers up to date about issues affecting them and what's happening in their community. Throughout my career I have covered a range of rounds and most recently I have been focusing on the business round.
I have been a journalist for more than a decade and in that time I have been keeping Daily Liberal readers up to date about issues affecting them and what's happening in their community. Throughout my career I have covered a range of rounds and most recently I have been focusing on the business round.
