For many of us, the Government’s early access to super scheme has been essential to survive the fallout from COVID-19, but now is the time to start thinking about the long term impact these withdrawals could have on your retirement savings.

Withdrawing up to $20,000 may not sound like much, especially if you have a good balance currently. But when you take into account the effects of compounding interest, you can end up with a significantly lower balance when it comes time to retire.

To see this difference, go to the superannuation calculator and change the super balance amount based on your withdrawal to see the real impact on your final retirement balance.

Although the Coronavirus and the health and economic outcomes are still a reality, and things may still be tough for you, now is the time to start planning to rebuild your superannuation balance.

In addition to the super guarantee contributions made by your employer, you can also make contributions. We suggest that you consult with a financial adviser to explore what is the most appropriate decision for you.

How can I rebuild my super balance?

  • Salary sacrifice – Pay yourself forward by asking your employer to make voluntary contributions on your behalf from your before-tax salary.
  • Make personal contributions from after-tax dollars. Set up a regular contribution from your bank account and start with as much as you can afford – even $20 a week will make a difference.

These contributions may be tax-deductible – by claiming a personal tax deduction against taxable income in the financial year; OR if you earn less than $54,837 a year, you may be eligible for a government co-contribution of up to $500. To find out more go here.

  • Spouse contributions – if you earn less than $40,000 per annum and your spouse is earning more, subject to eligibility rules, you may be able to receive a spouse contribution. Find out more
  • Consolidating your super – Using MyGov, search and locate lost and duplicate super accounts. Consolidating your super accounts into one fund may also reduce fees and reduce duplicated insurance held.

A useful resource is Super Guru which provides independent information from the Association of Superannuation Funds of Australia to help you grow your superannuation.

Please call us or email us if you need any further information or have any questions.