In this guide
When you’re aged 60 or more, you have the option to open an income stream (pension) with your super that provides you with regular periodic payments.
There are many types of retirement income streams but the most common is a simple account-based pension.
Learn more about when you can access your super and how to turn your super into retirement income.
If you choose to start a simple account-based pension, your minimum annual withdrawal is calculated every year by multiplying your account balance on 1 July by a percentage factor that increases as you age. This is often referred to as the minimum pension drawdown.
In the financial year you open your pension, the minimum payment is pro-rated to reflect the number of days remaining in that year.
Retirement phase account-based pensions have no maximum annual withdrawal.
If you’re under 65 and have not left a job after your 60th birthday or retired permanently, you can open a transition to retirement (TTR) pension. The minimum annual withdrawal for a TTR pension is the same as for a retirement phase pension but an annual maximum of 10% also applies. When you turn 65 or retire, your transition to retirement pension converts into a retirement phase pension with no maximum withdrawal.
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.
| Age of beneficiary | Percentage factor |
|---|---|
| Under 65 | 4% |
| 65 to 74 | 5% |
| 75 to 79 | 6% |
| 80 to 84 | 7% |
| 85 to 89 | 9% |
| 90 to 94 | 11% |
| 95 or more | 14% |
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 fortnightly, monthly, or quarterly payments. Annual minimum 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.
Read more about super pension trends in payment frequency and more.
Case study
Mike is a 66-year-old retiree with $200,000 in a super account-based pension on 1 July 2025.
Mike is required to withdraw 5% of his account balance, that’s $10,000, by 30 June 2026.
On 1 July 2026 the balance of Mike’s super pension has grown to $205,000, even after drawdowns, following a year of strong investment earnings. During 2026–27, Mike is required to draw down 5% of his account balance, which is $10,250 instead of $10,000 the previous year.
Calculating the first payment
If you start a simple account-based 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.
Example
Heather, 64, opened an account based pension with her balance of $643,000 on 1 March 2025. As this is the first year of her pension, the minimum payment for the year is pro-rated.
There are 122 days left in the financial year, from 1 March to 30 June, so the minimum withdrawal in the first year is $8,600 rounded to the nearest 10 dollars, calculated as follows:
$643,000 x 4% = $25,720. This is the minimum for a full year
The proportion of the financial year remaining can be represented as 122 days/ 365 days
The annual minimum is adjusted by multiplying these two figures
$25,720 x 122/365 = $8,596.82
Rounded to the nearest $10, the minimum for the first year is $8,600
Heather opts to receive the minimum amount in three monthly payments of $2,866.67.
Pension payment calculator
Use the calculator below to estimate the required minimum payment in the year your pension starts, or the minimum payment for a full year.
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