This is where a ‘condition of release’ has been satisfied to release money out of your SMSF. The most typical of these is where you have permanently retired from work and have reached your preservation age (currently age 55), have reached age 60 and have stopped a work arrangement, or have reached age 65 where your work status is irrelevant, and have commenced an income stream (pension) from your SMSF. This is known as being in the “pension phase” of the fund. Note however that there are other conditions of release such as transition to retirement pensions, total & permanent disability, and temporary disability.
Transition to Retirement: This will only apply to certain people (those who have reached preservation age, currently age 55) and involves taking a “transition to retirement” pension from your SMSF, where you may still be working (part time etc.) but need a top up of income from your SMSF assets. However, you can’t access any capital (lump sums) until you meet a full condition of release.