For many Australians, superannuation drawdown – also known as pension drawdown – sounds far more complicated than it needs to be. Words like “minimum rates”, “sequencing risk” and “longevity” get thrown around, and suddenly what should be a simple question (“Can I afford this?”) feels overwhelming.
The good news is this: drawing down your super doesn’t have to hurt your retirement savings – if it’s done thoughtfully.
Let’s take a step back and walk through what drawdown really means, when it makes sense to take money out, and how to do it in a way that supports your lifestyle and your long-term financial security.
What Is Superannuation Drawdown?
Once you retire (or meet a condition of release), many Australians move their super into an account-based pension. This allows you to draw a regular income from your super while the balance remains invested.
The government sets minimum drawdown rates based on your age – for example, at age 65–74, the minimum is typically 5 per cent of your balance per year (though temporary reductions can apply from time to time).
You can withdraw more than the minimum, but not less – and this is where strategy becomes important.
When Should You Start Drawing Down?
There’s no single “right” time. Some people begin drawing an income as soon as they retire, while others delay withdrawals if they have other income sources, such as part-time work or savings.
Generally, you may consider starting drawdown when:
You need income to cover living expenses
You’re eligible for tax-free pension payments (from age 60)
You want to replace employment income gradually
You’re looking to balance income with eligibility for the Age Pension
The key is ensuring withdrawals are aligned with actual spending needs, not arbitrary habits or calendar events.
How Much Should You Take?
One of the biggest risks in retirement is taking too much, too early – particularly during periods of market volatility.
This is often referred to as sequencing risk: withdrawing large amounts when markets are down can permanently reduce the longevity of your super.
A sensible approach is to:
Start with the minimum drawdown if possible
Increase withdrawals gradually as spending patterns become clearer
Maintain a cash buffer inside or outside super to avoid selling investments in down markets
Retirement is not static. Your income needs at 65 are often very different from your needs at 80.
Is Christmas a Time People Draw Down More?
Yes – and it’s more common than many realise.
Christmas often brings:
Travel expenses
Family gifts
Hosting costs
Helping children or grandchildren
While there’s nothing wrong with using your super to enjoy life, repeated large one-off withdrawals – especially during high-spending seasons – can quietly erode your balance over time.
Instead of dipping into super reactively, consider:
Planning for predictable annual expenses (like Christmas) in advance
Setting aside a separate savings account for discretionary spending
Spreading withdrawals evenly across the year
This helps preserve your capital and reduces emotional decision-making.
How to Draw Down Without Hurting Your Money
Smart drawdown isn’t about deprivation – it’s about structure.
Here are some practical principles:
Match withdrawals to real needs, not assumptions
Review your pension annually, not daily
Avoid panic withdrawals during market downturns
Use diversified investments to support long-term growth
Keep flexibility – income can go up or down as circumstances change
It’s also worth remembering that money left in super continues to benefit from a tax-free environment in retirement phase – a valuable advantage that rewards patience.
Balancing Enjoyment and Longevity
A common fear among retirees is either:
Running out of money, or
Not enjoying it enough while they can
The answer lies in balance.
Superannuation is not meant to sit untouched – but nor is it meant to be spent without a plan. Thoughtful drawdown allows you to fund a comfortable lifestyle today while still protecting tomorrow.
And if you’re unsure? That’s entirely normal. Retirement income planning is not something most people have practised before – and a qualified adviser can help you model different scenarios so you can move forward with confidence.
The Bottom Line
Superannuation drawdown works best when it’s deliberate, flexible and aligned with your life, not the calendar.
Whether it’s Christmas, travel, or simply the cost of living, your super can support you – just make sure it’s working withyou, not against you.
Simple Super Drawdown Examples (With Real Numbers)
Sometimes superannuation feels abstract because we talk in percentages instead of dollars. So let’s make this practical.
Example 1: Starting with the Minimum
Susan is 67 and has $500,000 in an account-based pension.
At her age, the minimum drawdown rate is 5 per cent, which means:
Minimum annual withdrawal: $25,000
That’s roughly $480 per week before tax (most pension payments from super after 60 are tax-free).
If Susan’s living expenses are modest and she also receives some Age Pension, sticking close to the minimum allows the remaining balance to stay invested and continue working for her.
Example 2: Taking More Than the Minimum
David is 72 and has $600,000 in super.
His minimum drawdown is still 5 per cent, or $30,000 per year.
However, David decides to withdraw $45,000 per year to fund travel and hobbies.
That extra $15,000 may not sound dramatic – but over 10 years, assuming modest investment returns, it could reduce his balance by well over $150,000.
That doesn’t mean David shouldn’t enjoy his retirement – it simply shows why understanding the long-term impact of higher withdrawals matters.
Example 3: Christmas Spending Without a Plan
Margaret and Peter, both 70, withdraw an extra $10,000 every December to cover Christmas, family travel and gifts.
If this happens:
During a year when markets are down
Without adjusting withdrawals elsewhere
That $10,000 isn’t just $10,000 – it’s money that also loses future growth potential.
A better approach might be:
Withdraw an extra $800–$900 per month across the year
Or keep a separate savings account for predictable annual costs like Christmas
This reduces pressure on their super at any one point in time.
Example 4: Using a Cash Buffer
Helen, 75, keeps 12 months of pension payments ($35,000) in cash inside her super fund.
When markets dip, she continues drawing her income from cash rather than selling growth assets at a loss.
This simple buffer helps manage sequencing risk and gives Helen peace of mind – she’s not reacting emotionally to market headlines.
The Takeaway from These Examples
Small increases in withdrawals can have large long-term effects
Planning for irregular expenses avoids “surprise” drawdowns
Minimum drawdowns are often a sensible starting point
Structure matters more than perfection
Super drawdown isn’t about getting every decision exactly right – it’s about making informed, intentional choices.