Is withdrawing super a good idea?
56% of Aussies would withdraw their super early if they could. But is it worth it?
Would you take money out of your super right now if given the chance?
More than half of us would - and for a few different reasons.
Why we want to access our super
- Help with of cost of living (17%)
- Put towards a home for myself (15%)
- Put towards an investment property (8%)
- Go on holiday (8%)
- Other reasons (4%)
The debate around accessing your super early for a house deposit has been around for years, and no doubt will pop up again in the near future.
But so far, the closest thing to accessing your super for a home deposit is the First home Super Saver Scheme.
As for accessing your super to go on a holiday, sorry, I don't see that happening any time soon!
Why is it bad idea?
Your super is your money, so you should be able to access it now if you want to, right? Well, not exactly.
There's a reason why our super is so difficult to dip into early, and it's actually for our benefit.
The number one objective of superannuation is to help fund your retirement.
Dipping into it early doesn't help meet this objective. In fact, it's the opposite.
Accessing some of your super early can cost you a lot more by the time you do reach retirement (even if that feels like a million years away at the moment).
Data from ASFA estimated that withdrawing $10,000 from your super at the age of 30 could cost you more than double that in retirement.
It's because you'd miss out on the compounded investment returns on that money.
So instead of wanting to take money out of our super, a lot of us would benefit from adding more money into it by making extra contributions.
If you can't afford to make extra contributions, no worries, you can still boost your super by comparing funds and switching to one with low fees and high returns.