If you satisfy a condition of release, your super account is generally paid as a lump sum. However, some benefits may be paid as a pension.
A pension gives you the flexibility to take your super in regular payments as an income stream while still earning investment returns on the balance of your account.
Retirement pensions allow you to combine the regularity of a pension payment with the option to take extra lump sums at any time and investment earnings are tax free.
You cannot make additional withdrawals with a Transition to retirement pension but you still benefit from many of the other features of a pension account. However, tax is paid on investment earnings.
Different tax rules apply to lump-sum and pension payments so it’s worth considering your options.
A $1.6 million cap on the total amount of super you can transfer to a pension account applies.