Pension Minimum Drawdown Calculator: Formula, Example and What the Result Means
Calculates the minimum yearly payment from an account-based pension. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Pension Minimum Drawdown Calculator.
Why it matters
Superannuation is Australia’s compulsory retirement savings system. Employers pay the super guarantee into your fund, contributions are taxed concessionally, and the money is generally preserved until you reach preservation age and retire. Small changes to contributions, fees or investment returns compound over decades.
What you need to enter
The calculator asks for 2 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Age at 1 July | 67 |
| Account balance ($) | 400000 |
The formula
Minimum = balance on 1 July × age-based rate (4% under 65, 5% at 65–74, 6% at 75–79, 7% at 80–84, 9% at 85–89, 11% at 90–94, 14% at 95+).
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Minimum annual payment | $20,000.00 |
| Minimum drawdown rate | 5% |
| Per month | $1,666.67 |
The headline figure is $20,000.00 (minimum annual payment). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the minimum annual payment changes with age at 1 july
The table below keeps every other input at the example value and moves only “Age at 1 July” up and down by 10% and 20%. It shows how sensitive the minimum annual payment is to that one figure.
| Age at 1 July | Minimum annual payment |
|---|---|
| 54 | $16,000.00 |
| 60 | $16,000.00 |
| 67 | $20,000.00 |
| 74 | $20,000.00 |
| 80 | $28,000.00 |
At 54 the result is $16,000.00; at 80 it is $28,000.00. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
Missing the minimum can cause the pension to lose its tax-free status for that year.
Keep going
Before relying on the number, read Pension Minimum Drawdown: What to Check Before You Trust the Number. You might also find these guides useful:
- Using a Super Guarantee Calculator in Australia: A Step-by-Step Guide
- Superannuation Balance Projection Explained for Australians
- How the Retirement Savings Goal Calculator Works (With a Worked Example)
Frequently asked questions
- Are the projections guaranteed?
- No. Investment returns vary from year to year. Treat projections as a guide for planning, not a forecast.
- What is the super guarantee rate?
- It is 12% of ordinary time earnings from 1 July 2025.
- Should I get advice?
- For decisions like salary sacrifice, contribution strategies or retirement income, a licensed financial adviser can look at your full situation. This site provides general information only.
Run your own numbers in the Pension Minimum Drawdown Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.