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News Hub Featured

How to rebuild a $10,000 early super withdrawal

Finance News Superannuation
01 June 2020 5 min read

New figures show almost 1 million young Australian workers closed or drained their super through the COVID early release scheme. But money taken out of super under the scheme doesn’t need to have a permanent impact on retirement savings. We’ve crunched the numbers to show how to rebuild an account balance in the future if an early withdrawal was made from super.

young woman at home doing finances on laptop 

In late March 2020, the Australian Government announced that people affected by coronavirus could apply to access up to $10,000 of their superannuation in 2019-20 and up to a further $10,000 in 2020-21. This option is now closed.

In December 2020, the Australian Prudential Regulation Authority (APRA) reported about 4.7 million Australians had accessed $36 billion under the scheme1. A separate report by the Australian Institute of Superannuation Trustees (AIST), showed nearly 1 million young workers under the age of 35 either closed their super accounts or now have less than $1,000 in super as a result of the early release scheme.2

What impact will an early withdrawal have on a person’s retirement?

ASIC MoneySmart released a new super withdrawal estimator to help Australians consider the impact a withdrawal today will have on their retirement savings. Here’s the estimated reduction a $10,000 withdrawal will have on the super balance of someone retiring at age 65.

$10,000 early super withdrawal
Age Years to 65 Estimated reduction to balance (in today’s dollars3)
20 45 $25,369
30 35 $20,648
40 25 $16,805
50 15 $13,678

It’s important for a person to understand what retirement they want in the future. Online tools such as the Government’s MoneySmart retirement planner calculator can help work out what someone needs need in retirement and whether they will still be on track even if they have taken some out.

If someone has taken money out of their super to help them get through the COVID-19 crisis, the good news is that it doesn’t have to be a permanent withdrawal. When they return to work and are on top of their finances they can add back to their super and rebuild retirement savings.

If they choose to, it’s possible to recover the money withdrawn by adding back small amounts over time. The younger the person is, the less they need to add because they have the benefit of time and the magic of compound interest on their side.

For a person under 40 years of age, our calculations show that they can recover a $10,000 early withdrawal by making after-tax contributions of around $10 to $15 a week until age 65. Over 40s could catch up by making weekly after-tax contributions of $15 to $20.

After-tax contributions to recover your $10k by age 65 3
Age Weekly Fortnightly Monthly
20 $13 $26 $55
30 $14 $27 $59
40 $16 $31 $66
50 $20 $40 $86

The more they add the sooner they’ll get their retirement savings back on track.

After-tax contributions to recover your $10k faster 3
  Weekly Fortnightly Monthly
In 5 years $45 $90 $195
In 10 years $26 $52 $112

Making extra contributions can be a great way to boost a super balance, but it does take commitment over time.

There are plenty of ways to add to super, including making additional contributions or regularly salary sacrificing. People who make voluntary after-tax contributions may be eligible to receive a co-contribution from the Australian Government.

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We’re here to help

QSuper members have access to over-the-phone financial advice. Personal financial advice may help save money right now, build a better future retirement, and set strategic goals.

Find out more.


1. Australian Prudential Regulation Authority, COVID-19 Early Release Scheme - Issue 35 | APRA, accessed 29 January 2021.
2. Australian Institute of Superannuation Trustees, media release, https://www.aist.asn.au/media-and-news/news/2021/nearly-one-million-young-workers-closed-or-drained, accessed 29 January 2021.
3. These figures are illustrative only and should not be relied upon as actual results will differ depending on the timing of contributions and returns and fees for each investment option. You should seek financial advice for your personal circumstances. The calculations are based on the assumptions used in the MoneySmart calculator www.moneysmart.gov.au (accessed 7 May 2020) for Accumulation accounts only. The calculation has been rounded to the nearest dollar. The estimates provided are shown in today's dollars, which means they are adjusted for inflation by 4.0% p.a. (2.5% p.a. due to the rising cost of living [CPI inflation] and a further 1.5% p.a. for the cost of rising community living standards). Investment returns are defaulted to an assumed rate of investment return before tax and fees of 7.5% p.a. Assumed tax on earnings is 7.0%.

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