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My Wife & I each have just over $1.4M in our SMSF. We are both 64 years old, retired and in pension mode. I have read that we both could add non-deductible contributions of $200K each this FY by using the bring forward contribution rule. I wanted to know if this is true? Also, what happens to the amount that goes over $1.6M cap? Would we have to move this into Accumulation Phase or the total amount will be in Pension Phase?
A: Yes, if your total superannuation balance is between $1.4m and $1.5m, you are under 65, and you haven’t made any material non-concessional contributions over the previous year, you can access the bring forward rule and contribute up to $200,000 into super (from your own monies). The age limit will be increased to 67 (under current Government plans) from FY21.
All super contributions are made to an accumulation account.
You can then roll-over to your pension account (commence a new pension) with any amount provided you haven’t exceeded your lifetime transfer balance cap of $1.6m. For example, if your transfer balance cap is currently $1.45m, you would only be able to move $150,000 into pension – the balance of $50,000 would stay in the accumulation account, where earnings would be taxed at 15%.pa.
