impacts of accessing super early
Glenn Harris. White man with a dark grey jacket and blue business shirt with top button undone. short beard with neat brown hair and brown eyes. smiling at camera. Headshot. Accountant Sydney Central Coast Tuggerah. About Us Bishop Collins Chartered Accountants

Glenn Harris

Director Audit and Business Services

impacts of accessing your super early with a green and yellow background and a cracked egg image

Your superannuation takes a journey of many years. Not unlike the long journey taken by Greek hero Odysseus your superannuation savings will face many trials and tests during its journey and even further challenges once you reach retirement.

So what are the impacts of accessing your superannuation early?

The government’s announcement allowing Australians to participate in the “coronavirus early release of super” was met with an overwhelming response. Within 18 days 745,000 people had registered via MyGov to access their superannuation early.

The Government estimates 1.6 million people will access their super fund early withdrawing a staggering total of $27 billion from superannuation savings. The Australian superannuation industry believes this number will in fact be closer to $65 billion.


We would like to take this opportunity to urge caution when considering accessing your superannuation balance early. Depending on your age a withdrawal of $20,000 from your superannuation may have a devastating impact on your superannuation balance at retirement.


Based on an annual net return of approximately 5% we estimate the reduction in superannuation balance at a retirement age of 67, by withdrawing $20,000, may look something like this:


Current Age203040


Reduction in retirement balance $ 195,000  $120,000 $75,000 $ 45,000  $28,500
Reduction in annual retirement income $ 9,900  $ 6,050  $3,800  $2,300 $1,400


Investment returns may be further diminished from a smaller superannuation balance where you need to cover ongoing insurance premiums. By withdrawing the funds from superannuation you will also miss out on the significant taxation benefits of saving in the superannuation environment. Future legislative changes may also restrict your ability to ever be able to put the money back into superannuation.


Rather than withdrawing $20,000 from your superannuation we suggest you consider alternative methods to manage your cash flow as part of the current crisis. This may include accessing your entitlement to government payments and discussing deferral of debt payments with your lenders.

We have covered all of the stimulus packages in a webinar. You can watch and listen to this webinar to see what alternatives are available from, the Government, the ATO and the ABA,  to drawing on your super. You can access this via this link:

In addition to this we suggest you consider adding to your superannuation on a regular basis if your cash flow permits now or in the future. For as little as the price of a cup of coffee per day an increase in superannuation contributions can have a significant impact on your retirement savings. This is illustrated in the case study below.


Case Study

Tony is currently 27 years of age and has a superannuation balance of $50,000. He is considering whether he should withdraw $20,000 from superannuation (option 1) even though he does not desperately need the cash at this time. After speaking with his financial advisor Tony considered not withdrawing the $20,000 plus contributing a further $5 per day into superannuation ($1,800 per annum) (Option 2).


The following chart shows the difference in Tony’s superannuation balance between option 1 and option 2 when he retires


a graph showing the difference in your super balance if you add $5 per day to it rather than withdraw from it

By selecting Option 2 Tony will have more than $350,000 extra in his superannuation account on retirement than if he selected option 1.


The above example shows it is never too early to learn how your superannuation can work for you so that you can maintain your lifestyle in your retirement.

Should you require support with your superannuation savings journey or to navigate through the requirements to access your entitlement to government incentive payments please contact us at Bishop Collins on (02) 4353 2333.

For more information on alternatives to using your super you can read the following articles, however the webinar link above will provide the most up to date information for you:

Economic Stimulus Packages

State Governments Assistance

Credit Support and Funding

Instant Asset Write Off  and Help with Apprentices and Trainees

Jobkeeper Explained



DISCLAIMER – This information was prepared for discussion purposes only and should not be relied upon for decision making. You should consult your professional financial advisor if you require additional  information. This information has been prepared by Bishop Collins Wealth Management Pty Ltd an Authorised Representative of Primestock Securities Ltd