Thousands of my fellow millennials are considering accessing their superannuation early and it’s got a lot of people nervous. And I’m starting to understand why.
I’m Ewan, Creativa’s Social Media Coordinator. If you couldn’t guess by my job title, I’m a “young person”, a Millennial. Technically maybe even a Gen Z, I believe.
I, like a lot of young people, never really cared about my super. For a long time, it was money being taken from my retail paycheque that I wouldn’t see for a very, very long time. But, I’ve come to think differently about my super and see why people might be nervous about millennials, in particular, accessing their superannuation early.
Let me be clear, I’m in no real position to give financial advice. If you’re struggling, as so many people are right now, you should speak with a financial adviser familiar with your situation. If you need it, you need it, simple as that. This policy is there to support people in need. But, if you can get by without out, and only if you can get by without it, there are some things to consider.
See, this video (above) – made by my colleagues at Creativa – changed my mind about super. Sure, now mightn’t be the right time to consider sacrificing a little bit of my income for the sake of my superannuation, but it showed me, for the first time, the impact “compounding interest rates” really have on your super. Super funds work really hard behind-the-scenes, and all the little increases you get to your balance make a big difference to how much money comes back your way when you retire.
Then I saw this article, written by Andrew Robertson at the ABC, who highlighted that if you’re 30 years old, and get a relatively low compounding interest of 5%, then the $20,000 you might take our now could be worth over $100,000 by the time you retire. That’s a lot of money and a big difference to your retirement!
It’s a bit like that Stanford marshmallow experiment. You know, that one where they give a kid a single marshmallow but tell them if they don’t eat it now they can have five marshmallows? Sure, it’s tempting to eat the marshmallow right there and then, but if you can hold off… you’ll have a hell of a lot more marshmallows in your future.
Of course, this is kind of tricky stuff to wrap your head around. And, it’s all irrelevant if you really need the support here and now. Thankfully, there are people out there helping us make sense of it.
Speak to a financial adviser before making any decisions and above all else, look after yourself and your family during this difficult time. As I said, I’m no financial expert.
If you need video experts though, then we’re here to help.
Most importantly stay home, stay connected and stay safe.