Early Superannuation

By August 12, 2020Financial Planning

One of the initiatives taken by the government early in the Coronavirus pandemic was to allow eligible Australians (those facing financial hardship) to obtain up to $10,000 from their superannuation accounts without meeting the usual conditions of release, such as retirement.

In fact, it has been possible to take $10,000 twice, across different financial years. Treasury estimates that up to 42 billion dollars will ultimately be withdrawn from the system.

There have been numerous anecdotes about young people making withdrawals to buy toys such as motorbikes and jet skis. After all, retirement is a long way off when you are young. In the vast majority of cases though, people seem to have behaved sensibly and paid down debt or merely kept it for a rainy day.

It is strange, but when you think about it, the government probably wants you to buy the toys rather than save it. After all spending keeps the economy going.

A very general advice would be to try to resist the temptation to withdraw superannuation at a young age, unless you are really desperate.

Certain members of this firm are quite surprised at how quickly humans age! The toys are long gone but retirement keeps approaching!