Minimum Pension Drawdowns: How Much You Must Take
Once you start an account-based pension, the government requires you to withdraw a minimum each year — a percentage of your balance that rises with age, from 4% to 14%. It's the trade-off for the pension's tax-free earnings.
- The rule: account-based pensions have a minimum annual payment set as a percentage of your 1 July balance, increasing in age bands.
- The rates: 4% under 65, 5% for 65–74, 6% for 75–79, 7% for 80–84, 9% for 85–89, 11% for 90–94, and 14% at 95+.
- Why it exists: the minimums ensure super is drawn down for retirement income rather than held indefinitely as a tax-free estate.
01 How the minimum is calculated
Each year, your account-based pension must pay you at least a set percentage of its balance as at 1 July. The percentage depends on your age, and it rises in bands as you get older. You can always take more — there's no maximum on an account-based pension — but you can't take less than the minimum without losing the pension's tax-free status. In the first year, the minimum is pro-rated from your start date.
Shows: the minimum amount you must draw from an account-based pension this year, by age (standard rates). Ignores: any temporary reduced rates, pro-rata in the first year, and that you can always draw more.
The minimum is widely read as a tax event, and it is not one. Payments from a retirement-phase pension are tax-free after 60, so being forced to draw more does not create a tax bill — it moves money out of a nil-taxed environment into your own name, where only the future earnings become taxable. The cost is the tax on what it earns next, not on the withdrawal.
On the defaults above, the worked example shows: The minimum rises with age — from 4% under 65 to 14% at 95+ — so drawdowns accelerate as you get older.
Source: ATO — Minimum annual payments for super income streams
02 The rate table
The standard minimum drawdown rates are: under 65 — 4%; 65 to 74 — 5%; 75 to 79 — 6%; 80 to 84 — 7%; 85 to 89 — 9%; 90 to 94 — 11%; and 95 or over — 14%. So an 80-year-old with a $800,000 pension must draw at least $56,000 that year. The percentages step up to ensure the balance is genuinely spent down across a long retirement, not preserved indefinitely.
Source: ATO — Minimum annual payments for super income streams
03 Planning around the minimum
For many retirees the minimum is less than they would spend anyway, so it never binds and is simply the mechanism by which their income arrives.
It binds for those with large balances and modest spending. The rate rises with age — reaching 14% at 95 — so a retiree who wanted to preserve capital finds an accelerating amount pushed out of the tax-free pension environment each year, whether they need it or not.
Because the payment itself is not taxed, the real cost of a forced drawdown is the tax on future earnings once the money sits in your own name rather than in the pension — which is what the two responses below are for.
Two responses are available. Reinvesting the excess outside super is straightforward, and for a retiree with little other income the tax on those earnings may be nil once the tax-free threshold and offsets are applied. Or the excess can be recontributed as a non-concessional contribution if you are under 75 and within the caps, which returns it to the concessional environment and converts taxable component to tax-free along the way.
The minimum is calculated on the 1 July balance and pro-rated in the year a pension starts, so a pension commenced in April requires only a fraction of the annual amount that year.
The full decision is in The Transfer Balance Cap: How Much Can Be Tax-Free.
Source: ATO — Minimum annual payments for super income streams
The minimum drawdown surprises people who think of super as a pot they sip from at will. It's designed to be spent — that's the deal for tax-free earnings. For most retirees it's below their spending and never bites. The ones to watch are large-balance, low-spend retirees in their 80s and 90s: the rising percentage can push out more than they want. That's not a tax problem (it's tax-free over 60), it's a what-do-I-do-with-it problem — and reinvesting or recontributing usually solves it.
FAQ
What is the minimum pension drawdown?
The minimum amount you must withdraw each year from an account-based pension — a percentage of your 1 July balance that rises with age from 4% to 14%.
What are the minimum drawdown rates by age?
4% under 65, 5% for 65–74, 6% for 75–79, 7% for 80–84, 9% for 85–89, 11% for 90–94, and 14% at 95 and over.
Can I take more than the minimum?
Yes — account-based pensions have no maximum. You just can't take less than the minimum without losing the pension's tax-free earnings status.
Sources
Regulator references
- ATO — Minimum annual payments for super income streamsThe minimum annual payment factors for an account-based pension, by age.Last verified: 2026-06-19
- ASIC Moneysmart — Account-based pensionsAccount-based pensions: how they are started, drawn and taxed.Last verified: 2026-06-19
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-06-19 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.