Self Managed Super Funds seek advice to avoid penalties

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Transcription

Announcer: It’s your family’s number one, it’s 96.5. And it is Wednesday, so it’s that time of the week where we catch up with our finance expert, Helen Baker. Evening, Helen.

Helen: Hi, how are you doing?

Announcer: Good, thank you. Now tonight, you’re going to talk to us about the latest trends and what we need to look out for.

Helen: Yes. So what’s common these days I guess is everyone’s after the new and best thing and what’s exciting and so one of those things that has come on the scene is the Self-Managed Super Fund. And a lot of people think, oh, I wonder if I should have one or I want to get one so I can do something. But you just have to be aware that if you’re getting a self-managed super fund, that it is subject to the same legislation as superannuation.

So you can’t do some things that you’d like to do. For example, a client of mine who needed $100,000, decided she’d just go into her self-managed super fund and take $100,000 out. And you can’t do that unless you meet what’s called a “condition of release”. So she’s going to end up getting a really big penalty, probably $10,000 plus having to pay a tax bill on that money, which is probably about $45,000. So very costly mistakes to where your future might end up, so please, please seek advice before you do those things.

Announcer: Oh my goodness, yes! And it’s read all the fine print and everything like that, really, isn’t it, is what we’re asking people to do?

Helen: Yeah I think the big thing is people don’t know what they don’t know and it’s very difficult to understand all the bits and pieces that you can and can’t do. So it’s worth just going and seeking advice before you go ahead and do something. Otherwise it’s afterwards, the penalties come in and very hard to get out of. So yeah, seek advice.

Announcer: Seek advice, that is the take home for this evening. If you learn anything, remember to seek advice.

Helen: Yeah. And while it’s holiday times, why not have a bit of a game of Monopoly with your kids where you can teach them about money?

Announcer: Ooh, I love it. I remember playing that as a kid, we’d spend hours playing Monopoly, fighting with each other. Anyway, but yes, it’s a great way to teach kids about money, I hadn’t thought about that, that’s a good one. And also a great time when they’re asking for things, oh can I have this, can I have that, to be thinking – showing them the value of money. Like my little one got $5 the other day from granddad, took it to the shops, she wanted something that was $25. No darling, you don’t have that amount of money.

Helen: Absolutely. That’s a good one.

Announcer: Great. Well alright, thank you for that, seek advice is what we want you to do and in the school holidays, because we’re in the lead up to school holidays, maybe play some Monopoly with the kids to teach them about money. Helen, if people want to find out more, where do they need to go?

Helen: Just go to OnYourOwnTwoFeet.com.au.