Warning for SMSF trustees: New superannuation pension cap of $1.6m now in place
The maximum amount of superannuation that can be used to fund a tax-free pension in retirement is now restricted to a cap of $1.6 million per member.
For example, say you are over age 60 and have met a condition of release (such as retiring from the workforce), or are over 65, and wish to start a pension. Prior to 1 July 2017, there was no limit on how much with which you could start a pension.
This had two positive effects. Firstly, all of the pension income was tax-free to you as a member, and secondly, all earnings on the assets used to fund your pension were also tax-free.
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