Minimum pension drawdown rates (2025–26) and calculator

Enter your age and pension balance in the yellow fields as at the most recent 1 July and the calculator will display your annual minimum pension payment amount for that financial year (1 July to 30 June).

What is an account-based pension?

Most super pensions these days are account-based (also called allocated pensions), so called because the pension is paid from a super account held in your name.

For SMSFs with account-based pensions, the amount supporting the pension must be allocated to a separate account for each member. 

However, some government defined benefit super schemes or annuities paid by life insurance companies offer non-account-based pensions where you agree that your fund will pay you a regular income over a set period, usually guaranteed for life or a fixed term. Unlike account-based pensions, the income stream does not have an identifiable account balance in the member’s name.

There is still a minimum annual withdrawal that is worked out by multiplying the purchase price of the income stream by your age-based percentage factor. In the first year you take the member’s age at the start of the income stream. In subsequent years, you take the member’s age on each anniversary of the start day.

What if I don’t withdraw the minimum pension amount?

Minimum pension withdrawals are mandated by the government. If you fail to comply, your super pension could lose its tax-free status.

If your super is with a large fund, it’s likely your minimum payments will be adjusted automatically each year.

If you have an SMSF, you need to be vigilant and arrange for the minimum pension payment to be made each year or risk losing the tax-free status of your pension.

Does the minimum drawdown affect my Age Pension?

The amount of Age Pension you receive is determined by the income test and assets test.

The income test is not affected by the amount you withdraw from your super pension, as Centrelink applies the deeming rules to estimate your super pension income.

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However, the assets test includes your total super balance and assets outside super. This presents an opportunity for retirees whose assets are only slightly above the Age Pension threshold, as the more you withdraw from your super the more Age Pension you may be entitled to receive.   

Why does the government set a minimum payment?

The reason for setting minimum annual payments is to satisfy the sole purpose test. That is, that super (and the generous tax concessions it receives) is designed to provide retirement income. It’s not designed as a tax-effective way to transfer wealth to the next generation.

The percentage factor – beginning at 4% and rising to 14% as you age – is generally considered a safe amount for retirees to withdraw annually while maintaining an account balance that will keep the income flowing through retirement. As it’s impossible to know how long any individual will live, these amounts are based on the average lifespan for Australians who reach age 65, 75, 80, 85, 90 and 95.

Your super income stream will stop:

• When there’s no money left in the account
• No minimum payment is made
• It is commuted (converted) into a lump sum
• When you die, unless you have a dependent beneficiary who is automatically entitled to receive the income stream.

There is no maximum annual drawdown other than the balance of your account, unless it is a transition-to-retirement (TTR) pension that is not in retirement phase, in which case the maximum amount is 10% of your pension account balance.

Calculating the first payment

If you start a super pension after 1 July, the minimum amount for the first year is calculated on a pro-rata basis according to the number of days remaining in the financial year, including the start day (see example below).

If your super pension commences on or after 1 June, no payment is required in that financial year.

The bottom line

Under the super rules, retirees with account-based super pensions are required to withdraw a minimum amount each financial year. The minimum amount is expressed as a percentage of your pension account balance, beginning at 4% for retirees aged under 65 and gradually increasing to a rate of 14% from age 95.

Failure to withdraw the minimum amount could result in your super pension losing its tax-free status.

There is no maximum withdrawal amount, the only limit is the remaining balance of your pension account. If you are unsure about how much you could safely withdraw each year without running the risk of your savings not lasting the distance, we recommend you seek independent financial advice.