Australia Account-Based Pension Calculator: Drawdown Income
Work out the monthly income an Australian account-based pension can provide — the income stream you draw from your superannuation once you retire — by spreading your balance over a chosen number of years while it keeps earning.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Monthly income | Total drawn | Growth while drawing |
|---|---|---|---|
| $800k · 5% · 25yr | $4,676.72 | $1,403,016.10 | $603,016.10 |
| $500k · 5% · 30yr | $2,684.11 | $966,278.92 | $466,278.92 |
| $1.2M · 6% · 25yr | $7,731.62 | $2,319,485.05 | $1,119,485.05 |
| $350k · 4% · 20yr | $2,120.93 | $509,023.48 | $159,023.48 |
How This Calculator Works
Enter your super balance at retirement, the return you expect, and how many years you want the income to last. The calculator finds the level monthly income that runs the balance down to zero over that period. An account-based pension (also called an allocated pension) is the main way Australians turn super into retirement income — you choose how much to draw, above a legislated minimum.
The Formula
Fixed-Period Drawdown
PV = savings pot, r = monthly rate (annual ÷ 12), n = number of monthly payments
Worked Example
An $800,000 balance earning 5% and drawn over 25 years provides about $4,677 a month. An account-based pension is created by moving your accumulated super into 'retirement phase' (or 'pension phase') once you meet a condition of release. The balance stays invested and keeps earning, while you draw a regular income from it. You must withdraw at least a legislated minimum each year (a percentage that increases with age — for example 4% in your 60s, rising in later decades), but there's no fixed maximum, so you control the pace.
Key Insight
The account-based pension is the cornerstone of how Australians fund retirement from super, and several features shape the real income. It's flexible, not a guaranteed annuity: your balance stays invested (you choose the investment mix), keeps earning, and you draw a regular income — but you bear the investment and longevity risk, since the money lasts only as long as the balance does. This calculator answers 'what level income exhausts the balance over N years', which is one way to plan, but the law works differently on the floor: you must draw at least a minimum percentage of the balance each year, and that minimum rises with age (broadly 4% under 65, stepping up through your 70s, 80s and beyond), recalculated annually on the balance — so actual minimum withdrawals are a percentage of a changing balance rather than a fixed dollar amount. The standout tax advantage this calculator doesn't model: for those aged 60 and over, both the investment earnings inside an account-based pension and the income payments are generally tax-free, making pension phase far more tax-efficient than the accumulation phase (which is taxed at 15% on earnings). There's a transfer balance cap limiting how much super you can move into the tax-free retirement phase, with excess kept in accumulation or outside super. The income also interacts with the Age Pension means tests, so drawing more (or holding more) can affect any government pension entitlement. Many retirees combine an account-based pension with the Age Pension and sometimes an annuity for guaranteed baseline income. This calculator gives a level monthly income that depletes the balance over your chosen horizon at a steady return; for a real plan, apply the age-based minimum drawdown percentages, account for the tax-free status if you're 60+, and consider the Age Pension interaction and sequencing risk.
Minimum drawdown percentages by age — the legislated floor
Account-based pensions have legislated minimum annual drawdown percentages that increase with age. For 2026, the standard rates are: 4% at ages 55-64, 5% at 65-74, 6% at 75-79, 7% at 80-84, 9% at 85-89, 11% at 90-94, and 14% at 95+. These are applied to the balance at 1 July each year, then divided across however many payments you choose (monthly, quarterly, annually).
Concrete example: a 67-year-old with $800,000 in their account-based pension on 1 July 2026 must withdraw at least 5% × $800,000 = $40,000 during 2026-27. They can take more (no maximum), but cannot take less. If they take only $30,000, the shortfall becomes taxable (loses the tax-free pension phase status) and may attract penalty taxation.
Strategic implication: the rising minimums force increasingly large withdrawals as you age. By age 85, the 9% rate means a $1M balance forces $90,000 of withdrawals annually — potentially more than needed for living expenses. This drives strategies like accumulating in spouse's account, gifting (with Centrelink implications), and Charitable giving.
The transfer balance cap: $1.9M maximum into pension phase
The Transfer Balance Cap (TBC) limits how much super you can move from accumulation phase (taxed at 15% on earnings) into retirement phase (tax-free earnings). For 2026, the TBC is $1.9M per person (indexed periodically). Amounts above the cap stay in accumulation phase, where earnings are taxed at 15%.
Couples can effectively double the cap: each spouse has their own $1.9M TBC, so a couple can have $3.8M in combined tax-free retirement phase. This is a powerful reason to equalise super balances during the accumulation years — contributing to the lower-balance spouse's account, or using spouse contribution splitting.
Excess transfer balance penalty: exceeding your TBC triggers Excess Transfer Balance (ETB) tax — 15% on excess earnings for the first breach, rising to 30% for subsequent breaches. The ATO sends an Excess Transfer Balance Determination requiring you to commute (move back to accumulation) the excess within 60 days. Plan carefully to stay below the cap.
Age Pension interaction: assets test and income test
Australia's age pension is means-tested through both an assets test and an income test. Account-based pensions count toward both. For 2026 single homeowners, the assets test full pension cuts out at $704,500; for couple homeowners, $1,059,000. The taper rate is $3 per fortnight per $1,000 above the threshold — so each $10,000 above the threshold reduces the pension by $780/year.
Income test: account-based pensions are deemed (assumed to earn a notional return regardless of actual return). Deeming rates for 2026: 0.25% on the first $62,600 single (or $103,800 couple), then 2.25% above. For someone with $1M in pension phase, the deemed income is ~$21,180/year for income test purposes — well below the income test threshold.
Practical implication: for many retirees, the assets test bites harder than the income test. Strategic asset positioning matters: principal residence is exempt from assets test (so paying down mortgage before retirement reduces assessable assets); gifting is limited ($10k/year, $30k/5-year max); some annuity products have favourable treatment. The full Age Pension for a single is around $30,000/year — meaningful enough to plan around.
Minimum drawdown percentages by age (2026 standard rates)
Applied to your account balance at 1 July each year. You can withdraw more (no maximum) but not less. Examples shown for $500,000 and $1,000,000 starting balances.
| Age | Minimum drawdown % | On $500,000 balance | On $1,000,000 balance |
|---|---|---|---|
| 55-64 | 4% | $20,000 | $40,000 |
| 65-74 | 5% | $25,000 | $50,000 |
| 75-79 | 6% | $30,000 | $60,000 |
| 80-84 | 7% | $35,000 | $70,000 |
| 85-89 | 9% | $45,000 | $90,000 |
| 90-94 | 11% | $55,000 | $110,000 |
| 95+ | 14% | $70,000 | $140,000 |
Earnings within an account-based pension are tax-free for over-60s. Withdrawals are also tax-free for over-60s. Combined with the $1.9M Transfer Balance Cap, this is one of the world's most generous retirement-income tax regimes.
Frequently Asked Questions
How is account-based pension income calculated?
This calculator finds the level monthly income that draws your balance to zero over your chosen period, while it keeps earning. An $800,000 balance at 5% over 25 years gives about $4,677 a month. In practice you must also draw at least a legislated minimum percentage each year, which rises with age.
What is an account-based pension?
The main way Australians turn superannuation into retirement income. You move your super into 'retirement phase', keep it invested so it keeps earning, and draw a regular income. It's flexible — you choose the drawdown above a minimum — but you bear the investment and longevity risk, unlike a guaranteed annuity.
Is there a minimum I must withdraw?
Yes — a legislated minimum percentage of the balance each year, which increases with age (broadly 4% under 65, rising through your 70s and beyond). It's recalculated annually on your balance. There's no fixed maximum, so you can draw more, but you must take at least the minimum.
Is account-based pension income taxed?
For those aged 60 and over, both the investment earnings inside the pension and the income payments are generally tax-free — a major advantage over the accumulation phase, where earnings are taxed at 15%. This calculator shows gross income; for over-60s that's effectively also the after-tax figure.
Does it affect my Age Pension?
It can. An account-based pension's balance and income interact with the Age Pension means tests, so how much you hold and draw may change any government pension entitlement. There's also a transfer balance cap limiting how much super you can move into the tax-free retirement phase. Many retirees combine both.
References & Authoritative Sources
- ATO — Australian Taxation Office — Account-based pensions — tax treatment and drawdown rules · consulted May 31, 2026 · Tax authority — minimum drawdown rates, tax-free status for over-60s, Transfer Balance Cap
- Superannuation Industry (Supervision) Regulations 1994 — Schedule 7 — minimum drawdown percentages · consulted May 31, 2026 · Statutory basis for legislated minimum drawdown percentages by age
- Services Australia — Age Pension means tests and account-based pension treatment · consulted May 31, 2026 · Age Pension administrator — assets test thresholds, deeming rates, taper formula
Related Calculators
Methodology & Review
The monthly income is the level amount that draws the super balance to zero over the chosen period, with the balance earning a steady return, compounded monthly. It does not apply the legislated minimum drawdown percentages (which rise with age), the Age Pension interaction, or the tax-free status of most pension-phase income for over-60s.
Updated