Account-based pension drawdown.
Minimum annual drawdown
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Monthly (tax-free after 60)
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Turning a super balance into a pension you can live on
When you move from the accumulation phase of superannuation into retirement, the usual path is to open an account-based pension (sometimes called an allocated pension). Your accumulated super is transferred into a retirement-phase account, you keep choosing how it is invested, and you draw a regular income from it. Two features make this attractive. From age 60 the income is tax free in your hands, and the investment earnings inside the pension are generally not taxed either, unlike the 15 percent that applies in accumulation. This calculator answers the first practical question every retiree asks: how much must I draw this year, and what does that look like as a monthly payment?
The minimum you are required to draw
The government sets a minimum annual drawdown so that super is actually spent in retirement rather than passed on as an estate. The percentage steps up with age. It starts at 4 percent while you are under 65, becomes 5 percent from 65 to 74, then 6 percent, 7 percent, 9 percent, 11 percent, and finally 14 percent once you reach 95. The percentage applies to your account balance at 1 July each year, and the tool rounds the resulting figure to the nearest ten dollars in practice, the way most fund administrators do. There is no maximum on an account-based pension, so you can take more than the minimum whenever you need it. The only floor is the minimum itself.
A 65-year-old with $600,000, step by step
Take the default scenario: a $600,000 balance at age 65. At 65 the minimum rate is 5 percent, so the required drawdown for the year is $30,000, which is $2,500 a month landing in your bank account with no tax withheld because you are over 60. Here is the calculation the tool runs.
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The chart below shows how the required percentage climbs with each age band. The same $600,000 balance would force a $42,000 drawdown at 80 and an $84,000 drawdown at 95, which is exactly why later-life withdrawals tend to run a balance down quickly.
The transfer balance cap and who this suits
One number this tool does not police is the transfer balance cap, the lifetime limit on how much super you can move into the tax-free retirement phase. It sits at $2 million for 2025-26. If your balance exceeds it, the excess has to stay in an accumulation account where earnings are taxed at 15 percent. For most people drawing a normal pension that cap is irrelevant, but high-balance retirees should check it before transferring. This calculator is built for someone planning the income side of retirement: deciding whether a given balance supports the lifestyle they want, or stress-testing how long the money lasts if markets are flat. Pair it with the Age Pension estimate, since a modest account-based pension and a part Age Pension together are how a large share of Australian retirees actually fund their later years.
A practical tip on timing your first payment
If you start a pension partway through a financial year, the minimum is pro-rated for the days remaining, and if you start it on or after 1 June, no minimum is required until the next 1 July. Retirees who commence in late autumn often draw nothing extra that first short year and let the balance compound, which is a small but genuine planning lever your fund will calculate for you on request.
Common questions
Is account-based pension income counted for the Age Pension income test?
Yes. Centrelink deems your account-based pension balance to earn income under the deeming rules for the income test, and the account balance counts toward the assets test, regardless of how much you actually draw. The home you live in stays exempt. This differs from the tax treatment, where the income is tax free after 60.
What happens if I only ever take the minimum?
Taking only the minimum preserves capital and, with a reasonable return, the balance can grow in the early retirement years before the rising percentages catch up. The trade-off is that you may die with a large super balance, which then passes to beneficiaries and can attract tax if it goes to a non-dependent adult child. Many retirees deliberately draw above the minimum to enjoy the money and manage that future tax.
Can I still add to super once I have started a pension?
You cannot add to an existing account-based pension, but if you are still eligible to contribute you can build a separate accumulation account and later start a second pension, or stop and restart the original with the extra money rolled in. Funds handle this routinely, though it pays to check the transfer balance cap each time.