Accessing $10,000 of superannuation early now could mean a loss of $60,000 in 40 years, according to an accounting practice.
BDO’s superannuation partner, Mark Wilkinson, warned against Australians using the Government’s scheme to access their super early due to financial hardship caused by the COVID-19 pandemic.
Wilkinson said while $10,000 did not sound like a lot, it would be worth $60,000 in 40 years for a 25-year-old today, and worth $38,000 for a 35-year-old.
“Whilst accessing your super right now might provide some relief if you’re facing significant financial pain, there should be a big, red ‘proceed with caution’ sign warning that your future-self will pay the price for this move,” he said.
“There have been similar arguments in recent years for accessing super as a way of helping first home buyers get into the market. But the numbers just don’t add up.”
Wilkinson said people needed to weigh up the long-term effects on their retirement savings if they were looking to access their super early.
“If you qualify and you do decide to withdraw funds from your super you need to be mindful that it’s not so easy to replace your retirement savings and you’ll be playing catch-up for a few years to come,” he said.
“Whilst the early access incentive may appear enticing, people should act with caution before implementing this measure and be aware of the longer-term implications.”
On Thursday, the Australian Taxation Office (ATO) confirmed over 456,000 Australians had been approved access to their super, totalling $3.8 billion.