When it comes to transitioning into retirement, self-managed super funds (SMSFs) continue to stand apart. One of the most noticeable differences is how confidently SMSF members move into pension phase and begin drawing an income from their super.

Data shows that SMSF members are significantly more likely to commence pension phase after age 65 compared to members of APRA-regulated funds such as industry or retail super funds. In fact, the majority of SMSF members in this age group have already made the shift, while less than half of APRA fund members have done the same.

What’s driving the gap?

This difference highlights how SMSF members often approach retirement more proactively. Several factors may contribute to this trend:

• Access to tailored advice
  SMSF members typically work closely with advisers and accountants, giving them greater awareness of pension strategies and tax efficiencies.

• Higher super balances
  Larger balances can provide the confidence and flexibility needed to commence income streams while still maintaining long-term sustainability.

• Greater control and engagement
  SMSFs require active decision-making, which often results in members being more informed and intentional about when and how they access their super.

A shift in policy focus

The Australian Government has made it clear that superannuation is designed to support retirement income—not simply to accumulate wealth indefinitely. Recent policy direction places increasing emphasis on:

• Encouraging members to use super to fund retirement living expenses

• Reducing the tendency to retain large balances purely for estate planning purposes

• Improving retirement income strategies, rather than focusing solely on accumulation

This broader policy push reinforces the importance of reviewing whether your super strategy aligns with your retirement goals.

Why pension phase matters

For Australians over 65 who remain in accumulation phase, there may be unintended tax consequences. In pension phase, investment earnings on supporting assets are generally tax-free, which can significantly enhance retirement income and cash flow.

Failing to transition at the right time may mean paying more tax than necessary—reducing the efficiency of your retirement savings.

Is your SMSF working hard enough for your retirement?

Every retirement journey is different, and the decision to move into pension phase should be based on your personal circumstances, income needs and long-term objectives.

If you’re unsure whether you’re making the most of your SMSF, Supervision can help. Our team can review your current structure, assess your readiness for pension phase, and ensure your superannuation strategy is aligned with the retirement lifestyle you’re working toward.

Book a session with Supervision and take the next step toward a more confident retirement.