SMSF Pension: Can I Still Make Super Contributions?
Self managed superannuation funds are very popular. However, there does seem to be a degree of confusion over who can make super contributions and when the contributions should stop. If you have a self managed super fund pension does that mean you are no longer free to make contributions? Read on to find out more.
When You Can Make Super Contributions
Making super contributions is still possible even when you are reached retirement age. However, there are certain rules that are attributed with such things. When the SMSF has reached the pension phase then you cannot make any further super contributions unless there is a separate account. If you have a separate account within the opened SMSF then you are fine otherwise it’s not possible. Pension accounts are only for giving out, not receiving so you aren’t allowed to make further contributions thereafter. You can try but the account won’t accept them so you’re wasting your time. However, if you open an account within the pension account then the super contributions can be made but only into that individual account.
Understanding the Differences between Pension and Accumulation Accounts
When you draw money from the self managed super fund then you are technically in the pension phase. However, when you contribute to the fund, your money is being invested and you are technically in the accumulation phase. You have to understand the differences between the accumulation accounts and pension account if you are to take these funds seriously. You can choose an accumulation account but not offer any super contributions for years.
Be Aware Of Potential Restrictions
You have up until the age of seventy five in which you can make further super contributions. That is still pretty impressive and it’s a nice retirement age too. However, your SMSF can be very profitable and it can offer you a nice pension. You can get a good income from this and even if you don’t choose to make many super contributions it is possible to earn decent rewards.
Who Are The SMSF For?
Anyone can technically set up a self managed super fund if they wanted to. There aren’t any real restrictions if you have the money and they can be used as a nice little nest egg in years to come. You can accumulate a great deal in little time with these funds. However, there are no guarantees but there is potential nonetheless.
Getting the Best from Your Investments
When a self managed super fund changes from the accumulation phase and into the pension phase, you still have options available. For most, they are more than willing to use the pension as in intended but for others, they still want to make super contributions. You can also visit this site for more to know. As said, if you want to do so, a separate account within the specified pension account is required. It isn’t too difficult and you should be able to continue to make contributions. Self managed super funds are simple in many instances and even though you might not understand every little detail, they can be a great option for you.
Category: Funds Management