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. If the amount ends in an exact five dollars, it is rounded up to the next whole ten dollars.įor SMSFs with account-based pensions, the amount supporting the pension must be allocated to a separate account for each member. Annual payment amounts are rounded to the nearest ten whole dollars. Payments must be received at least annually between 1 July and 30 June each financial year, although many retirees opt to receive monthly or quarterly payments. The percentage factor is set according to your age on 1 July in the financial year the pension is to be paid. For example, someone aged 65–74 must withdraw 2.5% of their account balance in 2022–23 under the temporary measure, but this amount doubles to 5% in the 2023–24 financial year. The table below shows the temporary rates and the normal rates. For those who will be celebrating a milestone birthday, such as 65, 75, 80, 85, 90 or 95, your minimum drawdown will increase even more. That means retirees who withdraw the minimum amount will need to double their recent level of payments in the 2023–24 financial year. ![]() 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.įrom 1 July 2023 the minimum annual drawdown reverted to the normal rates. The federal government temporarily halved the minimum pension drawdown rates for the 2019–20 to 2022–23 financial years. Once you start a retirement income stream, minimum annual payments are calculated on your account balance on 1 July each year, multiplied by a percentage factor that increases as you age. This is often referred to as the minimum pension drawdown. To start a super income stream, you need to transfer money from your super accumulation account into a retirement account up to the transfer balance cap which rose from $1.7 million in 2022–23 to $1.9 million from 1 July 2023 due to indexation. Most retirees choose to take at least part of their super as an income stream because it provides them with regular tax-free payments until their money runs out.Ī super income stream, also called a super pension or annuity, simply refers to regular periodic payments you receive from your super fund once you retire or satisfy a condition of release. ![]() Once you retire and reach your preservation age you can start to withdraw your super as an income stream, a lump sum or both. Upgrade your retirement with a SuperGuide membership.Why does the government set a minimum payment?.Does the minimum drawdown affect my Age Pension?.What if I don’t withdraw the minimum pension amount?.
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