When it comes to weathering the COVID pandemic, many of us have been doing it tough in lockdown.

To help Australians deal with financial hardship caused by the pandemic, the Federal Government’s early release of super scheme in 2020 allowed eligible people to withdraw up to $20,000 from their superannuation account.

If you took advantage of the opportunity to make a super withdrawal, you’re not alone. Out of 3.5 million applications, a total of 98% were processed and $36.4 billion paid out at an average overall super withdrawal of $7,6381.

Along with other programs such as JobSeeker payments and mortgage deferrals, the early release initiative played a big part in helping people with their living expenses.

Getting back on your feet

While some COVID restrictions remain, many Australians are suffering the ongoing effects on their personal finances.

But once the dust starts to settle, you could be faced with the challenge of rebuilding your super if you dipped into your retirement savings. The impact depends on your personal circumstances but generally, the younger you are, the more you could be affected.

If you’re near the start of your working life, any super withdrawal would have a bigger effect on your retirement nest egg as you’ll miss out on the long-term benefits of compound earnings in super’s tax-friendly environment. A 25-year-old who withdrew $10,000 from their super could suffer a reduction of $23,942 by the time they reach 67 – and this could rise to $47,885 if they withdrew the maximum $20,0002.

Even if you’re closer to retirement, any withdrawal could still affect your nest egg. But the good news is, there are ways to top up your super in the time you have left.

Of course, it’s not just COVID withdrawals that could affect your super balance – over the course of your working life, your retirement savings could take a hit for any number of reasons.

You might take money out of super to help buy your first home. You might spend time out of the workforce to travel, study or raise a family. Or you might experience a market downturn.

Rebuilding your super

There’s a good chance you could be retired for a long time, and after a lifetime of hard work you don’t want to worry about making ends meet on the age pension.

Super may not be your first priority and you probably have more pressing concerns. But if you’re lucky enough to be able to save a bit on the side, then there are plenty of ways to start putting extra money into super, whatever stage you’re at.

  • If you’re working, you could arrange salary sacrifice contributions with your employer to add to your super guarantee payments or see if you’re eligible for government co-contributions, depending on how much you earn. You could also make voluntary after-tax super contributions that could be tax deductible, up to a yearly limit.
  • If you’re in a relationship you could potentially benefit from spouse contributions and an associated tax offset of up to $540 if you’re eligible.
  • And if you’re retired you could look at making downsizer contributions into super from the sale of your home. 

Like to know more?


1 APRA, COVID-19 Early Release Scheme – Issue 36
2 MoneySmart accessing your super calculator – 4 7.5% return, 7% earnings tax rate and 0.85% ongoing fees. 


Super health check

If you have an AMP super account, you can learn more about your super by booking a complimentary 20-minute session with one of our super coaches.

Important information

Any advice and information is provided by AWM Services Pty Ltd ABN 15 139 353 496, AFSL No. 366121 (AWM Services) and is general in nature. It hasn’t taken your financial or personal circumstances into account.

It’s important to consider your particular circumstances and read the relevant product disclosure statement, Target Market Determination and terms and conditions, available from AMP at amp.com.au, or by calling 131 267, before deciding what’s right for you. The super coaching session is a super health check and is provided by AWM Services and is general advice only. It does not consider your personal circumstances.

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