There are essentially two ways to access amounts from your SMSF pension account(s): as a pension payment or a lump sum. The method you choose can have a significant effect on your retirement savings.
Why? Because the transfer balance cap imposes a lifetime limit on balances that can be moved from the accumulation stage of super into the tax-free “retirement” or “pension” phase.
Read more about the transfer balance account.
When you start a retirement phase income stream (a pension), the starting value is assessed against this lifetime limit, which is currently $1.9 million. Once this has been used up, you can’t move any further amounts into the tax-free retirement phase from your accumulation account.
