In a statement released on Tuesday, Industry Super Australia said although some consumers may need to rely on early access of super for short-term financial survival, withdrawing money should be “approached with extreme caution and only as a last resort”.
“The government has provided a significant program of wage stimulus measures, including increasing welfare support payments, which members should consider exhausting before tapping into their super,” the group said.
The comments come following the government’s announcement on Sunday that workers who had lost their jobs or were facing financial hardship as a result of the coronavirus crisis could access up to $20,000 tax free from their super over the next two financial years.
Industry Super chief executive Bernie Dean said that while industry funds would do all they could to help their members who had had working hours cut or been retrenched as a result of the crisis, it was not financially advantageous for members to consider withdrawing funds from their super unless absolutely necessary.
“Members should tread carefully and only think about cracking open their super after they’ve taken up the extra cash support on offer from the government – super should be the last resort given the impact it can have on your retirement nest egg,” Mr Dean said.
“Members need to know that taking your super now is like selling a house at the bottom of the market – you’ll lose money you would probably claw back over time.”
Following the forced closure of all hospitality venues leading to mass unemployment on Monday, the group pointed to modelling that showed younger workers in this sector who chose to withdraw funds from super could be particularly badly impacted in the long term, with 20-year-olds who took out $20,000 predicted to lose $120,000 by retirement as a result.
The average 30-year-old would lose $100,000 by pulling out the full $20,000, while 40-year-olds would lose about $63,000 on average, Industry Super data revealed.
Wouldn’t want to have anything to do with REST or Hostplus in the next 6 months. That’s a load of $20k withdrawals coming in the next 4 months, and no contributions. Hope Scott Pape has good PI cover for all his recommendations he’s made without BID
Get real people – most of these dodgy comments are to push very narrow viewpoints…..there is some merit in most of them but not one has shown perspective on the other side of the coin – which is where getting $20K out at the bottom of the equity market will crystalise the loss and prevent recouping in an upswing.
This is an adviser site – show restraint and provide balanced views, otherwise its just noise and vitriol to push a personal agenda
Agreed. The number of comments on this site that are willing a downfall of IAS’s is sickening. It makes me embarrassed to be a financial adviser.
I wonder how mr barefoot is going now?
Hopefully this will also push the debate forward regarding true to label asset allocation and investment funds.
Agreed. The recent ownership changes of SuperRatings and Chant West will hopefully advance that cause as well.
Those organisations have given “independent” endorsement to the deceptive product labelling by union funds, in exchange for the advertising licensing revenue they get from those funds. Let’s hope their new owners will transform them into genuine independent researchers, rather than an extension of the union fund marketing department.
ISA need to get real……..”funds should only be accessed if Centrelink benefits are insufficient to cover expenses”???. Centrelink benefits are below the poverty line. It’s easy for ISA executives to say but the reality for real people is something totally different. The biggest issue will be the run on iliquid super funds who won’t have the liquid assets to fund the redemptions. Super Fund staff are already stressed out and run off their feet.
Ponzi pyramid scheme hopefully topples as it freezes up funds due to insane over allocations to artificially highly valued ‘unlisted’ or ‘other’ assets and skewed heavy weighting to equity assets in ‘balanced’ or ‘conservative’ funds compared to standards IFA’s use. Sounds mean that I hope this during asomewhat stressful period for the population, but better this now and it gets investigated properly (unlike anything the pitiful ASIC BS has done to date) rather than in 15 years time when it all falls apart as the majority of members go into retirement and contribution flows start reducing.
Of course…..nothing to do with their illiquid assets
Back in March 2019 Sam Sicilia Hostplus’ CIO (Chief Investment Officer) was interviewed by Bloomberg. Saying….. and I hope this was a miss quote
“Hostplus has held no cash since at least 2011 and bonds in its portfolios were effectively zero over the past three years, according to Hostplus. The firm prefers stakes in office buildings, pipelines and emerging technology”.
liquidity problems coming
I bet they do not sure how liquidity will go with all these withdrawals less contributions day of reckoning.
No cash to pay the bills???
Industry funds need member victims to continue to drink the fund poison to cure the thirst of pigs in control of funds.Watch for redemption freeze, no liquidity because of investments in illiquid assets.
Read Animal Farm by Orwell.