Easiest ways to put your withdrawn superannuation back into your retirement savings
Cash-strapped Australians who have pulled out their super early can end up losing tens of thousands of dollars in retirement. But it’s easier than you might think to pay it back.
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Cash-strapped Australians who have ripped out their superannuation prematurely can end up losing tens of thousands of dollars in retirement, but it is achievable to pay it back.
New data crunched by Queensland-based super fund QSuper shows money taken out of super early doesn’t have to be a permanent withdrawal and can be repaid in a timely fashion.
Its data shows if a 30-year-old who withdrew $10,000 in super put an additional $14 back in after-tax each week until retirement age at 65, the money would be recovered.
A 40-year-old would need to throw in an extra $16 a week and a 50-year-old would need to tip in an additional $20.
QSuper head of member experience Jason Murray said through “the magic of compound interest” the money could be retrieved.
“The younger you are the less impact it would have on your ability day to day to recover it,” he said.
“People who might be closer to retirement won’t have that window of time to put it back so they’ll need to make higher contributions to avoid any impact on their retirement figures.”
Mr Murray said Australians could set up automatic transfers once they got back on the payroll or consider salary sacrifice and adopt the “out of sight, out of mind” approach.
QSuper has $113 billion in funds under administration and 585,000 members.
Latest statistics show 1.8 million people have accessed more than $14.6 billion in their retirement kitties under the Federal Government’s early access to super scheme.
The average amount withdrawn is $8165.
The Australian Institute of Superannuation Trustees’ chief executive officer, Eva Scheerlinck, said about one in three people accessing their super were under the age of 30 and had time to tip the withdrawn funds back in.
“Once you are back at work, making a small super top up of $10 or $15 a week – the price of a few coffees – could make a real difference to how much money you have at retirement,” she said.
The Association of Superannuation Funds of Australia’s chief executive officer, Martin Fahy, said accessing super early had helped “support many Australians in their time of need”.
He said being able to tip a small amount back into accounts could make a big difference to retirement.
“To boost your super, you can make before-tax concessional contributions, such as salary sacrifice, or after-tax contributions,” Dr Fahy said.
“You may also be able to top up your super with government co-contributions or via contributions from your spouse.”
SUPER REBUILD
After-tax contributions to recover $10,000 by age 65
Age Weekly Fortnightly Monthly
20 $13 $26 $55
30 $14 $27 $59
40 $16 $31 $66
50 $20 $40 $86
After-tax contributions to recover $10,000 quickly
Weekly Fortnightly Monthly
In 5 years $45 $90 $195
In 10 years $26 $52 $112
Source: QSuper used the MoneySmart calculator based on net growth of 6.18 per cent.