See explanation of Smart retention policy:
Over time backups will be deleted automatically. There will remain one backup for each of the last 7 days, each of the last 4 weeks, each of the last 12 months. There will always be at least one remaining backup.
You can also set custom retention. Example: 2D:U,1W:1D,4W:1W,36M:1M works fine for me.
You can find more explanation of retention policy in this post