Working from home may have its disadvantages, the dog won’t talk back to me (total conversation killer) and the UberEATS leftover Salt & Pepper Tofu is staring at me. However, the ability to work from home during this trying time is a privilege that many may not have.
Many employees have lost their jobs or are facing reduced hours whilst also battling a pandemic, school closures, supermarket raids and an impending total lockdown. The Government have validated that this is a crisis for many of our population and therefore the rules around early super access on compassionate grounds are being relaxed.
If you are unemployed, eligible to receive Centrelink benefits or have had your working hours reduced by 20% or more, you can apply to access up to $10,000 of your superannuation tax free from mid-April. A further $10,000 may be accessed in the next financial year.
The decision to access your retirement savings early should not be taken lightly, as it is just that, a savings plan for your eventual retirement. Our compounding interest article shows that taking $10,000 now and the reduction in super contributions due to not working will have a greater impact on your retirement income in years to come due to less funds spending time in the market.
If you can get by without needing your superannuation funds, it would be ideal to leave these funds in place. Furthermore, accessing funds now may involve selling down growth assets at distressed prices. However, if you are in need, the incentive of accessing it tax free makes it a worthwhile time to do so.
Do you need assistance with applying for early access of your superannuation? Do you have any questions relating to the government announcements or general financial planning matters? Contact the team at Wakefield Partners today. I know I’m in need of human conversation!
