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Minimum pension drawdown rates (2024–25) and calculator

Once you retire and reach your preservation age, or turn 65 even if you continue working, you can start to withdraw your super as an income stream, a lump sum or both. Most retirees choose to take at least part of their super as an income stream because it provides them with regular tax-free payments until their money runs out.

A super income stream, also called a super pension, simply refers to regular periodic payments you receive from your super fund once you retire or satisfy a condition of release.

To start a super pension, you need to transfer money from your super accumulation account into a retirement account up to the transfer balance cap which rose from $1.7 million to $1.9 million from 1 July 2023 due to indexation.

Once you start a retirement income stream, minimum annual payments are calculated on your account balance on 1 July each year, multiplied by a percentage factor that increases as you age. This is often referred to as the minimum pension drawdown.

Minimum pension payment rates

Note: The federal government temporarily halved the minimum pension drawdown rates for the 2019–20 to 2022–23 financial years. This was in response to the financial impacts of the pandemic, so retirees would not be forced to sell superannuation assets to meet the minimum annual payment at a time when markets were volatile.

From 1 July 2023 the minimum annual drawdown reverted to the normal rates.

The table below shows the normal rates and previous temporary rates. For example, someone aged 65–74 must withdraw 5% of their account balance from the 2023–24 financial year onwards. Prior to that, the rate was temporarily halved to 2.5% for the 2019–20 to 2022–23 financial years. The percentage factor is set according to your age on 1 July in the financial year the pension is to be paid.

Age of beneficiaryNormal percentage factor
(From 1 July 2023)
Temporary percentage factor
(2019–20 to 2022–23)
Under 654%2%
65 to 745%2.5%
75 to 796%3%
80 to 847%3.5%
85 to 899%4.5%
90 to 9411%5.5%
95 or more14%7%

Source: SIS Act


Payments must be received at least annually between 1 July and 30 June each financial year, although many retirees opt to receive monthly or quarterly payments. Annual payment amounts are rounded to the nearest ten whole dollars. If the amount ends in an exact five dollars, it is rounded up to the next whole ten dollars.

Case study

Mike is a 66-year-old retiree with $200,000 in a super account-based pension on 1 July 2023.

Mike is required to withdraw 5% of his account balance, that’s $10,000, by 30 June 2024.

On 1 July 2024 the balance of Mike’s super pension has grown to $205,000, even after drawdowns, following a year of strong investment earnings. During 2024–25, Mike is required to draw down 5% of his account balance, which is $10,250 instead of $10,000 the previous year.

Minimum pension payment calculator

Our calculator below estimates your minimum pension payment amount.

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Responses

  1. John Waugh Avatar
    John Waugh

    I have had a smsf together with my wife (separate) since 1999 and we retired 2008. I now want to wind up the smsf and just transfer the total to our personal joint account mainly because I am now nearing 80 and I do not want to burden my wife with running the fund when I am gone. The smsf is made up of mainly bank shares and cash. Is there much involved in doing this and when is the best time to wind it up. We have an accountant who audits the funds each year but apart from that we are in complete control of the happenings within the fund.

    1. SuperGuide Avatar
      SuperGuide

      Hi John – You can learn about winding up an SMSF in the following articles

      Best wishes
      The SuperGuide team

  2. Marilyn Della-Vedova Avatar
    Marilyn Della-Vedova

    Thanks for your guide just what I was looking for in plain layman format. It is a credit to you for this information.

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