How to Avoid Losing Superannuation to Fees after Quitting Job and Starting Own Business?

• 

  Hithere on 31/10/2021 - 10:56

  You could consider opening a self funded super fund and transfer your REST super into it.

  You may require professional advice to do this.

  • 

    AndyC1 on 31/10/2021 - 11:02

    +3

    I would not do this as there are way too many hurdles and costs for the $5K to justify it. The ATO requirements will eat up money allot quicker than the existing fees.

  • 

    Seraphin7 on 31/10/2021 - 15:01

    And with annual fees on SMSFs typically in the $2k - $3k range … vs. under $100 in many cases, that may not be smartest option.

• 

  rektrading on 31/10/2021 - 11:06

  -2

  i have no plans to return to a regular job and am going to support myself with my own ventures. I do not want to make ongoing contributions to my super as i value using my money to set up my future now rather than than later and am quite capable of making my own investments.

  Congratulations. This is the next best financial decision someone can make.

  is there other sneaky ozbargain ways to use it for something useful?

  People that can't get THEIR money out of pension funds should consider switching to a high growth/technology portfolio and hope that the gains will outperform the fees.

  Enjoy your first step in working toward financial freedom.

• 

  Bonsaichop on 31/10/2021 - 11:07

  +3

  I moved to Virgin Super after quitting my job and becoming self employed and it's only gone up since (almost doubled in 8 years) The only contributions i've made were the ones where the government was making a co-contribution or to offset my taxable income.

  In reality if you do end up with extra cash left over at the end of the financial year and want to reduce your taxable income it's not the worst idea to put it away for retirement age.

• 

  Eeples on 31/10/2021 - 12:05

  +1

  I think it depends on your age and income.

  If you are in your 50s then making a 25K payment each year and claiming that as a tax deduction might make sense on your tax bill each year and you can feel the money will be yours soon. (At 60).

  If you are under 50, as per previous advice just put it in the highest performing stream (which is usually shares). [note: if you are under 50 (or even a bit over 50) you should not assume you can get your money out at 60].

  This is only my opinion. I am not a financial planner.

• 

  avoidfullprice on 31/10/2021 - 12:32

  Figure out what type of "fees" you want to minimise

  Fixed annual account keeping fees - switch fund

  Balance based admin fees - switch investment

  Investment / Indirect Cost - as long as the investment has a higher long term gain in the future to cover the fees, than it is not a worry.

  Is my only option let the fee's eat it till it hits $200

  $6000 balance is when the protection kicks in , but I guess your sentiment is you don't want your money to be eaten by fees.

  https://www.apra.gov.au/protecting-your-super-package-freque…

• 

  p1 ama on 31/10/2021 - 14:55

  +1

  I'd happily let the government euthanize me if i hit 65 and need support lol

  Lol, that's rich coming from someone who has $5K in superannuation and needed to draw it down during the pandemic to get by.

  • 

    rektrading on 31/10/2021 - 15:54

    +1

    People taking their tax-free money out of pension funds during times of crisis are financially smart.

    Tax-free withdrawals don't come very often and should be taken advantage of when they do.

    • 

      p1 ama on 31/10/2021 - 16:28

      That’s not my point, my point is that if one is in a position where withdrawing $10 - 20k is making a big impact on their financial position (OP’s words: “i withdrew some while it was possible during the pandemic which has greatly helped me get to the point i am now”), they probably should not be making bold claims such as the above.

      • 

        rektrading on 31/10/2021 - 16:58

        +1

        So they withdrew $20,000 in March 2020 and bought TSLA and 11x their money.

        Or they withdrew $20,000 and went all-in on ETH at $100.

        Both options are life-changing money. Enough to say bye-bye to their day job and start their path to financial freedom.

      • 

        luminousfox on 31/10/2021 - 17:30

        +1

        I put that money into Z1P while it was at 5$ then sold close to the feb peak, not as a great investment as rektrading is suggesting but it certainly helped fast track a lot of things for me, i put the importance of it helping in so i wouldn't get crucified for the unpopular opinion of not loving contributing to superannuation. An amount like that would easily help put a down payment on a house if that was my intention which is sure going to secure a future better than being 65 who rented their whole life with no savings, super is just a bandaid by the government for people who cant manage their own savings and eventually become a drain on taxes, i can see why it's needed but i can also see how money can help now rather than later if its not being spent on frivolous things.

        • 

          p1 ama on 31/10/2021 - 19:56

          -1

          @luminousfox:

          i put the importance of it helping in so i wouldn't get crucified for the unpopular opinion of not loving contributing to superannuation

          I never said anything about whether you liked to contribute to superannuation or not. You seem a bit dense to not get my original point, which is that shit can happen and making prophetic claims like "euthanise me if I need support by 65" is stupid because (i) you're not actually going to hold to that, and (ii) you should never underestimate the chances of shit happening to you.

          You can go out tomorrow and get hit by a bus and be left a quadriplegic. In my experience, the "don't need nobody" types are the first in line for a handout when shit hits the fan.

          super is just a bandaid by the government for people who cant manage their own savings and eventually become a drain on taxes

          Yes, because yoloing all of your money into Z1P is the prime example of a fantastic investment strategy.

          • 

            rektrading on 31/10/2021 - 20:32

            @p1 ama: It sounds like someone is upset that people took out tax-free money from their pension funds and made real gains now instead of waiting for 30Y to 40Y.

            Different people have different risk profiles. OP took the risk and was rewarded. They can now chill with their gains while planning their next step.

            • 

              p1 ama on 31/10/2021 - 22:24

              @rektrading: Again, you’re still missing the point of what I’m saying.

              I don’t know OP, so can hardly be upset. If I was going to be jealous, I might as well pick Bezos or Musk to cry over right?

              I’m not one to promote waiting for 30 - 40 years. I make risky investments myself, I’m an ex-banker, I’ve been around risk takers all my life. I spent most of my younger days in board rooms with private equity partners who make 7 figure salaries. So no, I’m not “jealous”.

              Also FWIW, I don’t get this whole “set for life” thing - so OP bought Z1P at what $5, and sold at $14 at its peak? Wow, turned $20K into ~$55K. Maybe if OP made 100x that, I’d be jealous.

              My point is not to say dumb shit like “euthanise me if I need support at 65” if you’re not actually going to stick by it.

• 

  djsweet on 31/10/2021 - 15:40

  If you change the investment options to indexed shares I think that is fee free.

• 

  blueyez on 04/11/2021 - 12:24

  Prime Super charges no admin fees for balance under $6k worth considering and all Super funds can't charge you more than 3% of your balance if it's under 6k (refunded at end of financial year)