Retirement
Withdrawing super could cost less than you think
The impact of early access to superannuation could be exaggerated, with most Australians still likely to experience a comfortable retirement despite digging into their nest egg, new research has found.
Withdrawing super could cost less than you think
The impact of early access to superannuation could be exaggerated, with most Australians still likely to experience a comfortable retirement despite digging into their nest egg, new research has found.

Research by the Grattan Institute has pointed out that retirement incomes will still fall for workers who withdraw their super early, but that cost will be offset by higher aged pensions.
The Grattan Institute said retirement income will fall for workers who have accessed their superannuation early, but this will be offset by a higher rate of government support.
“Someone earning the median wage of about $60,000 today can expect their total super income through retirement to fall by about $80,000 in today’s dollars,” said Grattan household finances director Brendan Coates.
“But their total retirement income would fall by only $24,000 in today’s dollars, or about $900 each year, because their lower super balance at retirement would be largely offset by larger pension payments.”

The Grattan Institute highlighted a higher aged pension would still cost the federal government less than extra super tax breaks that result from an increase to the super guarantee, and that increasing the guarantee now could reduce take-home pay for workers and increase the gender pay gap.
“System defaults like the rate compulsory super need to be set so they work for most Australians,” Mr Coates said. “And while around one in five Australians have accessed their super early, that leaves four in five that haven’t.
“[Policymakers] can only justify forcibly lowering someone’s living standards during their working life – by lifting compulsory super – if we are protecting them from even worse outcomes in retirement.”
However, under this model, lower-income earners would lose the same amount in accumulated super as middle-income earners but would also receive less extra aged pension compensation.
The Grattan Institute plans would offset this loss by increasing rental support and Newstart allowance for these workers.
“Of course, some low-income Australians remain at risk of poverty in retirement – especially those who rent – but struggle even more before they retire,” Mr Coates said. “And boosting Rent Assistance would do far more than higher compulsory super to help these vulnerable Australians, and without reducing their take-home pay before they retire as higher compulsory super would.”
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