Early release of your superannuation
For more information read the "Early release of your superannuation" article.
What is happening to your super?
Given the recent market declines due to COVID-19 it is worth considering the impact to your largest investment, your super account. It is highly likely your super balance has taken a hit since share markets around the world adjusted to the economic downturn caused by the virus.
Given a large portion of your super is invested in shares, it may mean that your super has gone backwards, potentially up to 20% since the highs only a month ago.
What happened during the Global Financial Crisis (GFC)?
Your super is a long term investment and it will be exposed to many market cycles over your working life. Let's take the global financial crisis (GFC) in 2008. Since the GFC, 10 year annualised returns of the US share market (S&P500) have been 17.8%. This is an investment return 1.5 times better than the long term average returns.
Put another way, if you had a super balance of $100,000 and remained invested in a growth fund you would have a nest egg of $214,000, while a member who panicked and shifted to a defensive option would have a far smaller balance of $164,000 (Super ratings).
Should you change your super?
The plan for most working Australians is to keep their super invested in a balanced or growth option and hang tight. Staying invested provides an opportunity to reap the financial rewards when markets improve, compounding the long term returns on your super investment.
Keeping your super invested is not the same as staying with an under-performing super fund. Your super is like any other financial product, not all providers are equal. Some funds charge high fees, others have a long history of poor performance.
The most important measure for super is the long-term net return.
- Long-term means performance over the last 3 to 10 years (don't pay much attention to 1 year performance)
- Net return means what is left in your pocket after the fund takes their fees.
To keep on top of your super, download Rollit Wealth. We provide unbiased, independent information on all super funds open to new members.
General advice warning
Rollit Wealth provides general information only. You should assess whether the information is appropriate for you having regard to your objectives, financial situation and needs and consider obtaining independent professional advice before making an investment decision. If information relates to a specific financial product you should obtain a copy of the PDS for that product and consider that statement before making a decision whether to acquire the product. Roll-it Super Pty Ltd. ACN 611 756 140. AFSL Authorised Representative No. 1273703 of MSC Advisory Pty Ltd. ACN 607 459 441. AFSL 480649 (MSCA).