3 things you could have done with your early accessed super
With all the gambling ads on television lately, it is no surprise that some people who accessed their superannuation early, put their money towards their gambling funds.
Unfortunately, data gathered by researchers at AlphaBeta showed that Australians spent 67 percent more time than usual on online betting. That was just the first week of April.
During the course of the pandemic, online gambling in Australia has grown 140%, according to the Office of Liquor and Gaming Regulation (OLGR) Queensland.
It is terrible to think that all that money that could have compounded to create a comfortable retirement or even prop up the economy, has gone into the coffers of online gambling operators.
Online gambling has, in fact, seen the largest boost of any sector of the economy, even eclipsing streaming services.
With overall consumer spending down and retirement savings raided, the policy hasn’t really worked as it was intended.
That is certainly the assumption made by AlphaBeta, part of Accenture and Illion, which has highlighted the issue of there being no income check prior to allowing people to access their super.
Even more concerning was the finding that a third of early released Super payments were being spent in the first two weeks.
A hefty 64%, appears to have been spent on discretionary items such as clothing, furniture, restaurants and alcohol.
“There's a group of people out there living very large on pizza and beer courtesy of tax-free super. These are the most expensive pizzas they will ever eat,” said Illion chief executive Simon Bligh.
“This money is available for anyone with a bit of super who puts their hand up. It's a situation that was entirely avoidable.”
11% was spent on gambling.
The scheme which was designed to support people in financial hardship, however it hasn’t panned out that way.
A rethink of the scheme should be priority before the next up-coming super release date of 1 July. The problem is accessing $20,000 now could mean you lose $80,000 by retirement.
That’s a lot of money wasted on gambling sites and entertainment. Money you can’t get back.
So what should you do with your money if you accessed it early?
- Put it back into the economy by purchasing essentials
The money has been released to help you survive a period of economic uncertainty. This means it should be used to help you purchase essential items that help you live your life, without fear of losing your home or not being able to put food on the table. So do just that. Purchase food and essential goods and services. Buy the items you need to survive. This not only keeps you and your family going, it helps stimulate the economy, unlike an online gambling account.
- If you don’t spend it, at least save it until you really need it
Instead of spending your early accessed superannuation straight away, at least put it an easy to access savings account. You won’t make the gains you would by leaving it in your super long-term, but at least you’ll have peace of mind that you can draw on these funds when you really need them, whilst the money does earn some interest.
A high interest savings account would be ideal, but you’d have to check the fine print with regard to funds access. You can compare a range of high interest savings accounts here. A cash management account may also be helpful.
- Budget the money
If you suddenly find $10,000 in your account, add it to your incomings and outgoings. Use this money is if it was always part of your budget. This will help you spend it on the things you need, rather than the things you want. A budgeting tool such as InfoChoice’s Budget Planner can help you plan how to best use the money.
With the 1 July deadline looming for the next release of super funds to those who have requested early access, now would be a great time to consider whether you really do need those funds.
What will you use the money for? If it is for essential items? If the answer to these questions is yes, then while not ideal, you should access the money. If the answer is no, keep it with your super fund. Your money, statistically, will grow over time.
This update is not financial advice. This article is general news and information.
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