The Financial Planning Association of Australia The Financial Planning Association of Australia

FPA urges Australians to seek advice before withdrawing super

The Financial Planning Association of Australia (FPA) has urged all Australians to seek financial advice before withdrawing up to $20,000 from their retirement savings following the announcement of an unprecedented move by the Federal Government.

On 22 March, Prime Minister Scott Morrison announced that Australians who lose their job or a significant portion of their income as a result of the COVID-19 (coronavirus) pandemic will be eligible to withdraw up to $20,000 from their superannuation. The measure will see withdrawals capped at $10,000 before 30 June and a further $10,000 from July.

While the FPA supports this measure as an option for Australians who need it, CEO Dante De Gori CFP® stressed that early access to retirement savings comes with strict conditions.

“Superannuation access should be used as a last resort. It is to be used to fund retirement and its primary purpose must be respected, even in these increasingly uncertain times,” he said.

“The access is only available for people who are unemployed, have had their working hours/business income reduced by 20 per cent or are on Centrelink payments,” Mr De Gori said.

The FPA recommends any individual who meets the requirements consider whether using retirement savings is the best option for them and to consider all alternate options before they do use their super.

“If you have a financial planner you should speak to them first about how to manage your financial situation at this time. If you do not have a financial planner then you should consider contacting an FPA member to assist you,” Mr De Gori said.

The FPA’s Match My Planner service has recently seen a spike in activity by Australians using the free matching service to find a CFP® professional to help them through this uncertain time.

The online service is designed to create matches based on an Australian consumer’s personal profile of money and life goals, not just location. It instantly notifies eligible CFP professionals that consumers are interested in financial planning services and it facilitates open conversation in order to build trusted relationships between consumers and their potential planner via the messaging feature.

FPA CEO Dante De Gori said everyone has their own unique financial circumstances and may require a different solution.

“For those who do not have access to a qualified financial planner, they should consider all their options such as speaking with their bank, utility providers, landlord and other service providers to see what relief and other options are available to you before you decide to access your super,” he said.

“But obviously if you need to access your super you should and if possible, make a promise to yourself to replace what you access when your situation turns around in the future.”