How much super do you have to withdraw each year? The plain-English guide every new retiree needs

One of the most common questions people have as they approach retirement goes something like this: Can I just leave my super alone and take out as little as possible?

It is a completely reasonable thing to wonder. You have spent decades watching that balance grow, and the idea of drawing it down – knowing there is no more going in – can feel genuinely daunting. The instinct to protect it, to touch it as little as possible, is entirely understandable.

But here is what most people don’t realise: once you move your super into what is called an account-based pension – which is how most Australians receive their super as a retirement income – the government requires you to withdraw a minimum amount every year. You cannot simply let it sit there untouched. And if you don’t take out at least the required amount, the tax-free status of your super can be lost, which is a costly mistake to make.

The good news is that the rules are not complicated once you understand them. Here is everything you need to know.

First: the difference between accumulation and pension mode

While you are working and your employer is paying super into your fund, your super is in what is called the accumulation phase. There are no mandatory withdrawals in this phase – the money just sits and grows. You cannot access it until you reach preservation age, which for most Australians is 60.

Once you retire at 60 or older, most people roll their super into an account-based pension. This is a separate product – sometimes called a retirement income account or an allocated pension – where your money stays invested and you draw regular payments from it. Around 80 per cent of retired super fund members have one or more account-based pensions. This is the stage at which the minimum drawdown rules kick in.

What are the minimum withdrawal rates?

The minimum is calculated by multiplying your account balance on 1 July by a percentage that is determined by your age. The formula is simple: minimum payment equals your 1 July account balance multiplied by your relevant age percentage.

The current rates for 2025–26 are:

Age
Minimum withdrawal rate
Under 65          4%

65–74.              5%

75–79.              6%

80–84.             7%

85–89.             9%

90–94.            11%

95 and over.   14%

So if you are 67 years old with $400,000 in your account-based pension on 1 July, you are required to withdraw at least $20,000 (5 per cent of $400,000) before the following 30 June. That works out to roughly $1,667 a month, or $385 a week – which for many retirees is less than they actually need to live on, meaning the minimum rate is a floor, not a ceiling.

You can receive payments as often as you like – fortnightly, monthly, quarterly or annually – as long as you have received at least the minimum total by 30 June each year.

Why does the minimum go up as you get older?

The logic behind the increasing rates is straightforward. The government wants to ensure that super is being used to fund your retirement, not accumulated as an inheritance. Because you are holding money in an account with tax benefits where earnings are tax-free, the government requires that these retirement savings are actually being used to fund your retirement. The higher you get in age, the faster you are required to draw down your balance – reflecting the reality that you have fewer years ahead in which to spend it.

What happens if you don’t take out the minimum?

This is the part that catches some people out, and it is worth taking seriously. To maintain compliance with superannuation regulations and retain access to the tax-free earnings concession, you must withdraw at least the minimum pension amount by 30 June each financial year.

According to the ATO, if you do not make the minimum payment in an income year, the pension will be treated as having ceased at the start of that income year for tax purposes – and therefore your tax-free status ceases. In practice this means the earnings on your pension assets – which would otherwise be completely tax-free – could become taxable at 15 per cent, potentially costing you thousands of dollars for what is essentially an administrative oversight.

The practical solution is simple: set up a regular payment from your super fund – monthly works well for most people – and your fund will automatically ensure you are meeting the minimum. Most industry super funds handle this automatically.

Can you withdraw more than the minimum?

Absolutely – and many retirees do. There is no maximum annual withdrawal from an account-based pension. You can withdraw as much as you need, whether for lifestyle expenses, helping adult children, or any other purpose. The minimum is just that – a floor below which you cannot go, not a cap on what you can access.

The only exception is if you have a transition-to-retirement pension, which applies to people who have reached preservation age but have not yet fully retired. If you have a transition to retirement income account, you cannot take out more than 10 per cent of your account balance each financial year. Once you fully retire, that cap disappears.

What if you only just started your pension mid-year?

If you start your pension partway through the financial year, the minimum is calculated on a pro-rata basis based on the number of days remaining in that year. And if your pension commences on or after 1 June, no payment is required in that financial year at all.

A word about making your money last

The minimum drawdown rule is designed to ensure you are using your super – but the bigger challenge for most retirees is making sure their super lasts as long as they need it to. A few things worth knowing:

Your balance is still invested even as you draw it down. A well-managed account-based pension in a balanced or growth option can continue to earn returns that partially or fully offset your withdrawals in good years, which is why some people find their balance actually grows in early retirement despite taking payments.

Taking only the minimum is a sensible starting strategy in the early years of retirement, particularly if you have other income sources such as part-time work or rental income. It keeps more of your money in the tax-free environment for longer.

The minimum rates increase as you age, which is designed to ensure the money doesn’t just sit there indefinitely – but at the rates set for people in their 60s and 70s, a well-invested account can sustain withdrawals for a very long time.

It is worth using your super fund’s online retirement calculator to model how long your balance might last at different withdrawal rates. Most major funds offer these tools free of charge, and they can give you a much clearer picture than abstract percentages do.

The one thing to do before 30 June every year

Check that you have received at least your minimum pension payment for the financial year. Log into your super fund account, look at what you have received since 1 July, and compare it to the minimum figure on your annual statement. If you are short, request a top-up payment before 30 June. It takes five minutes and protects thousands of dollars of tax-free earnings.

This article is general in nature and does not constitute personal financial advice. Superannuation rules can change and your personal circumstances will affect what is right for you. Please consult a licensed financial adviser or contact your super fund for guidance specific to your situation.