There are several benefits for members who make lump sum withdrawals from their super fund once they are in retirement and pension phase.

When a member is in pension phase, they must make minimum pension payments from their fund in order to meet the pension requirements and enjoy tax free income on the earnings supporting the pension.

SMSF minimum pension payment requirements

However, any excess amount which is above the minimum pension amount can be taken as a lump sum withdrawal from either a member’s pension or accumulation account depending on the members situation.

Depending on a member’s situation and circumstances, the excess amount which is taken as a lump sum withdrawal can even be recontributed back to the fund as non-concessional contribution which increases the members tax free amount and has estate planning advantages.

To help advisers and Trustees understand the benefits of lump sum withdrawals for members in retirement, AAS has put together a short two-page document explaining the benefits and processes involved.