The last year or so has been trying on many. As a result of the financial hardship caused by coronavirus, you may have had to access some of your super savings, or have reduced or ceased regular contributions. We consider how you can boost and rebuild your retirement savings when your circumstances allow.
Early access and a change in contribution strategy
Accessing some of your super savings may have helped you to make ends meet. If you were eligible, you may have been able to withdraw up to $20,000 from your super account under the temporary changes to the access rules before 31 December 2020. In other cases, regular contribution strategies may have been amended or put on hold as financial circumstances changed.
The impact of a withdrawal or a reduction in your regular contributions on future retirement savings differs based on a number of important variables, including:
- how much you withdrew
- your age and years until retirement
- your investment allocation and future returns
- fees and other account expenses, and
- future contributions made to your account.
Boosting and rebuilding your savings
While your top priority at the moment may be maintaining the cashflow you need to meet ongoing family and lifestyle expenses, there are some great ways you may be able to boost your retirement savings in the future when your circumstances allow. Even small regular contributions could be important in getting your superannuation savings back on track for retirement, as every little bit helps.
We have summarised how some super strategies could help to boost your savings between now and retirement. When your circumstances improve and you have opportunity to consider rebuilding your retirement savings, think about it as soon as possible. The sooner you start, the more chance you’ve got to ensure you can achieve the lifestyle you want when you retire.
Important information and disclaimer
This communication has been prepared by Bridges Financial Services Pty Ltd trading as MLC Advice ABN 60 003 474 977 AFSL 240837, Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323 (‘Consultum’) and Godfrey Pembroke Group Pty Ltd ABN 38 078 629 973 AFSL 245451 ('GPG'), members of IOOF Holdings Limited ABN 49 100 103 722 ('IOOF') group of companies, registered office Level 6, 161 Collins Street Melbourne VIC 3000, for use and distribution by representatives and authorised representatives of Bridges, Consultum, GPG and Australian Financial Services Licensees with whom an IOOF member has a commercial services agreement.
It does not take into account your objectives, financial situation or needs. Please seek personal advice before making a decision about a financial product. Information in this document is current as at July 2021. No liability or responsibility is accepted by IOOF or any of its subsidiaries, or by any agents, officers or employees of IOOF and its subsidiaries, for any loss arising from reliance on this communication. Any opinions expressed constitute our views as at July 2021. Case studies are for illustration purposes only. Any tax information provided is a guide only. It is not a substitute for specialised tax advice.