Once past the age of 55, self managed superannuation funds (SMSFs) members should run more than one account in their fund, according to an SMSF sector expert.
"In the 21st Century fund, once someone turns age 55, for the rest of that person's life or membership inside that fund, they will be running dual accounts," SMSF Strategies principal Grant Abbott told an audience of advisers during his SMSF Strategy Day presentation.
"In fact they may have possibly up to four or five accounts in that fund," he said.
The basic split centres on having an accumulation account for additional contributions, and a pension account for a member's income stream.
Structuring an SMSF in this manner could also help members reduce the need for holding multiple cash accounts, Abbott said.
"Why would you need an external bank account when you've got a cash management account inside your super fund?" he said.
One of the keys to making the strategy work, is for advisers to ensure their clients budgeted their income requirements accurately, for the coming year.
"This is particularly applicable to the high-end of the market. You've got to get them in June to figure out how much they need to live on during the year," Abbott said.
More than 700 delegates have attended the SMSF Strategy Day.
