Calculate your minimum annual pension payment and see how long your super balance will last in retirement.
Understanding Minimum Pension Drawdown Rules
When you convert your superannuation to an account-based pension, you must withdraw a minimum amount each year. This rule exists to ensure super is used for retirement income rather than indefinite wealth accumulation. The minimum is calculated as a percentage of your balance at 1 July each year.
2024–25 Minimum Drawdown Rates by Age
| Age |
Minimum Rate |
| Under 65 | 4% |
| 65–74 | 5% |
| 75–79 | 6% |
| 80–84 | 7% |
| 85–89 | 9% |
| 90–94 | 11% |
| 95+ | 14% |
Tax-Free Pension Payments
From age 60, all pension payments from a taxed super fund are generally tax-free — including both the tax-free and taxable components. This makes the pension phase highly tax-efficient compared to drawing investment income from outside super.
Investment Returns in Pension Phase
Earnings in the pension phase are also tax-free (up to the Transfer Balance Cap of $1.9 million). This compares to 15% tax on earnings in the accumulation phase. The combination of tax-free earnings and tax-free withdrawals makes account-based pensions one of the most tax-efficient structures available to Australian retirees.
Frequently Asked Questions
What happens if I don't make the minimum drawdown?
If you fail to withdraw the minimum amount by 30 June, your pension account technically fails to meet the conditions for pension phase. The ATO may treat the fund as being in accumulation phase for that year, losing the tax-free earnings benefit. Your fund administrator should notify you if you're at risk of falling short.
Can I put money back into super from my pension withdrawals?
If you are still under 75, you can re-contribute pension payments to super as non-concessional contributions (subject to the $120,000 NCC cap and total super balance rules). This is sometimes done as part of a re-contribution strategy to increase the tax-free component of super for estate planning purposes.
Does the Age Pension affect my required drawdown?
The Age Pension is separate from the minimum drawdown rules. Your super pension balance affects your eligibility for the Age Pension under the assets test, but the minimum drawdown rate is set purely by your age — not by whether you receive the Age Pension.
What is the Transfer Balance Cap?
The Transfer Balance Cap ($1.9 million in 2024–25) limits how much super you can transfer into the tax-free pension phase. Amounts above the cap must remain in accumulation phase (where earnings are taxed at 15%) or be withdrawn. Exceeding the cap triggers excess transfer balance tax.