“I guess the old saying is true. A fool and his money are easily parted,” said Rob.
I’d hoped it was a statement, because after what he’d just told me, there was no reassurance I could give him.
Rob was a fool.
Six months ago, Rob’s mate from Melbourne paid him a visit. And after drinking all his beer, Rob’s mate let him in on a secret – he’d found a company that allowed him to access his superannuation early, and even better – he could do what he liked with the money!
Hello new car, hello new boat and goodbye mortgage.
Now Rob wasn’t going to let this opportunity pass, he contacted the company who helped his mate, let’s call them Dodgy Super Access Pty Ltd, and a few weeks and $4000 in fees later, had his own Self managed super fund.
As far as Rob was concerned, it was technically his money, so he followed a similar path to his mate – paid off the house, bought a new car and took an overseas holiday.
It was a fantastic plan, until last week when the Australian Tax Office sent Rob an assessment notice.
Rob’s face quickly drained of colour from that overseas holiday; he’d breached the rules regarding the administration of superannuation funds, and faced taxes on the money he’d accessed.
Unfortunately, it was going to get worse for Rob. The ATO isn’t known for its forgiving nature, and as I explained, a hefty fine could swallow the rest of his super.
Had Rob sought professional advice, he’d know superannuation can only be accessed before retirement – in the case of severe financial hardship, or on compassionate grounds.
You’ll be glad to know there’s a happy ending to this story, Rob made this huge mistake so you don’t have to!
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