Question 1

What are the minimum drawdown rates for an Account Based Pension?

Accepted Answer

The ATO sets minimum percentages based on your age: 4% for ages under 65, 5% for 65–74, 6% for 75–79, 7% for 80–84, 9% for 85–89, 11% for 90–94, and 14% for 95+. You must withdraw at least this amount each year.

Question 2

What happens when my super runs out?

Accepted Answer

If your Account Based Pension balance reaches zero, the pension ceases. You may then be eligible for the full Age Pension if you meet the income and assets tests. The Age Pension provides a safety net of up to approximately $29,000/year for singles.

Question 3

Is investment income taxed in retirement?

Accepted Answer

No. Once you convert your super to an Account Based Pension (after age 60), investment earnings are tax-free. This is a significant advantage of keeping money in super during retirement.

Question 4

What is a Transition to Retirement (TTR) pension?

Accepted Answer

A TTR pension allows you to access some super before retiring, typically from preservation age (55–60). Drawdowns are capped at 10% per year, and investment earnings are taxed at 15% (unlike a regular ABP which is tax-free).

Question 5

How long should I plan for my super to last?

Accepted Answer

ASIC defaults to modelling until age 92, or at least 5 years beyond retirement. Life expectancy for Australian men at 67 is about 87, and 89 for women. Planning to age 92+ provides a buffer against longevity risk.

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