Saturday, July 11, 2020

Coronavirus forced Samuel to dive into retirement and worried about long-term impact

Must read

Technology: WhatsApp 2020, tricks: CLICK HERE and learn how to transfer your d files

We go with the following information that we have for you today. Check out this trick and apply it now. If there...

does your city organize its July 14 fireworks?

Due to the coronavirus crisis, many cities have canceled or postponed their traditional July 14 festivities. ...

Classification, departure times, television hours

The PGA TOUR continues on Saturday in the third round of the Workday Charity Open at Muirfield Village. Here's...

One out of seven: This Pokémon card was auctioned for $ 90,000

Have you played Pokémon before, haggled bitterly for every card, and taken on some battles in the school yard? If you still have...

Samuel Clarke knows that withdrawing retirement savings early is not ideal.

But the digital strategist, whose business is down about 60 percent, said the cost of a young family and the company’s ongoing overhead costs left him with no choice.

“The main bank account is overdrawn and we had to transfer funds to another account just to buy groceries,” said the father of two children under the age of three at 7:30 am.

Mr. Clarke is now one of 900,555 applicants who have been approved for release of up to $ 10,000 from their retirement pension under the federal government’s coronavirus assistance plan.

Under the government’s hardship program, people who have suffered a financial blow as a result of COVID-19 can request access to $ 10,000 from their super this fiscal year, plus $ 10,000 next year. It is intended for people who have been made redundant or whose hours have been reduced and for independent traders who have seen their income drop by 20% or more.

Coronavirus update: follow the latest news in our daily envelope.

The biggest super withdrawal ever

The government expects about 1.7 million Australians to draw about $ 28 billion in super money – the largest and most abrupt retirement pension withdrawal in Australian history.

Financial experts say they are concerned about the precedent that this access will create.

Analysis of pension consultants, Chant West, shows that a 30-year-old who takes $ 10,000 now could expect to have about $ 25,000 less in retirement, in today’s dollars .

That makes a difference of about $ 1,400 a year from their retirement income.

If the 30-year-old wanted to try to make up for lost ground, he could consider contributing an additional $ 200 a month for about five years after he returned to work.

“It’s not something I think anyone would be wise to take lightly,” said Mr. Clarke.

“It is money that should be saved for retirement, ideally, but we are in exceptional circumstances.”

Do you know more about this story? Contact Carrington Clarke at clarke.carrington@abc.net.au

Line chart showing Australia's current growth factor Covid-19 from 0.88 to April 28, 2020

Find out more

“It’s money for survival”

Samuel Clarke photo shootSamuel Clarke photo shoot
Samuel Clarke photographs a product for a website.((ABC News)

Mr. Clarke’s business, Salt Kreative, was affected by the flow effect of the coronavirus crisis.

Business is down about 60 percent after both a reduction in the work of key customers and an increase in the time before customers pay their bills.

“This is [created] the kind of pinch of cash flow that has been very difficult, “he said.

“It is simply due to the necessities in terms of things that we cannot afford to pay, which keeps our rent and puts food on the table.”

Mr. Clarke and his wife Melany, who also requested early access to his super, aim to spend as little money as possible.

“We are not going to go on fancy trips or do anything crazy with money – it is money for survival,” he said.

“I am concerned that the long-term effects will occur, but the plan is to pay it back as soon as possible once we are up and running.”

“I think at the end of the day it’s about having options right now and having that money available will help us get through and survive.”

He hopes he will not have to reapply next year.

“I would like to say no,” he said.

“[But] I don’t think the economy will rebound as quickly.

“Fingers crossed, it would be nice not to touch it.”

“I don’t have a job, I can’t pay the rent”

Michaela Menhartova is sitting outside.Michaela Menhartova is sitting outside.
Michaela Menhartova hopes to use the money of her super student for “a safer career”.((ABC News: Aaron Hollett)

Michaela Menhartova also requested early access to her super egg nest. Her hours as an occasional English teacher have been reduced due to the pandemic.

“In one day, I no longer have to go to work. I am in a shared house, I have no job, I cannot pay rent. I have to go home,” said Ms.. Menhartova.

“So I went back to my parents, where I haven’t lived for at least 10 years. So it’s a big shock to my lifestyle.”

She hopes that her super money will allow her to study for a safer career.

“I was thinking about a career change and when I heard about being able to withdraw your super, I thought it would be a good way to start, go back to university and use this super to pay my studies.”

Early withdrawals could change the industry

Mark carnegieMark carnegie
Mark Carnegie is concerned that the super shallows will begin to change their behavior.((ABC News: John Donegan)

Venture capitalist Mark Carnegie is concerned that super funds will change their behavior to take into account people who withdraw money sooner than expected.

He is concerned that funds will turn to allocating money to liquid assets, such as cash or bonds, on long-term stocks.

Simply put, these safer assets will mean that returns to investors over time will drop significantly.

“Doing it once and setting the precedent will certainly lead to this reallocation, which will hurt our children and grandchildren,” said Carnegie.

“This means that the liquidity levels in the growth asset portfolios end up being much higher than before.”

“It is a choice”

Senator Jane Hume, Deputy Minister of Superannuation, said the government’s super withdrawal plan had been “targeted, proportionate and temporary”.

“We do not expect there to be continued access to early retirement pension release,” she said at 7:30 a.m.

“For the 832,000 Australians who have already accessed their retirement pension throughout the early release program, you must understand that there is one case of financial hardship, a story of financial hardship behind each of these 832,000 cases . “

After the interview, Senator Hume contacted 7:30 a.m. to say that the number of Australians allowed to access their super had increased to 900,555.

“And what [is] the alternative for these people? They may have had to sell their car, take out credit card debt, or go to a payday lender, “she said.

“It is a choice. It is an option for individuals, and only individuals can decide if it is the best decision for them.”

Space to play or pause, M to mute, left and right arrows to search, up and down arrows for volume.

Parts of Australia have had no new cases of coronavirus in more than a week.

.

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest article

Technology: WhatsApp 2020, tricks: CLICK HERE and learn how to transfer your d files

We go with the following information that we have for you today. Check out this trick and apply it now. If there...

does your city organize its July 14 fireworks?

Due to the coronavirus crisis, many cities have canceled or postponed their traditional July 14 festivities. ...

Classification, departure times, television hours

The PGA TOUR continues on Saturday in the third round of the Workday Charity Open at Muirfield Village. Here's...

One out of seven: This Pokémon card was auctioned for $ 90,000

Have you played Pokémon before, haggled bitterly for every card, and taken on some battles in the school yard? If you still have...

Queue out: excitement in Zeil am Main

The "Reptile emergency call" reached the police inspection in Haßfurt on Friday evening: A local resident on Abt-Wolf-Strasse in Zeil am Main had seen...