From 20 April 2020 the Australian Government is allowing early access to superannuation savings for people affected by Coronavirus (COVID-19). If eligible, individuals can apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020, and a further $10,000 from 1 July 2020 to 24 September 2020.
There is plenty of discussion about why it might be a bad idea to access superannuation early but for anyone with high interest debt or an urgent need for cash it might be a very simply decision that can be based on some common sense and potentially create long term financial advantage if financial discipline is established for the future.
Consider the hypothetical example of someone who has a $20,000 credit card debt with an interest rate of around 20% p.a. If they leave their super account intact, one thing they may need to consider is whether they are confident their superannuation will return anywhere near 20% p.a. on a continuing basis into the future? Of course, there are many other things that need to be considered and ASIC has published additional information that must be considered before making any decisions.
It seems there may be many Australians who have high interest debt or an urgent need for cash and should consider if they could potentially benefit from the early access to superannuation that the current Coronavirus epidemic presents. As always, the devil is in the detail so never make an investment decision without considering all the options and always seek appropriate advice from a licenced professional when required.
HOT TIP: Beware of scams asking for a payment in return for assistance to access super early. You only need to visit myGov to start the process.
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Disclaimer: The information in this post is of a general nature only, is incomplete in the views expressed and has been provided without taking account of your objectives, financial situation or needs. No representation is given, warranty made or responsibility taken about the accuracy, timeliness or completeness of the information and it must not be acted on. Because of this, we recommend you consider, with the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances. Past performance is not a reliable indicator of future returns.