Retirement Drawdown Calculator Australia

How retirement drawdown differs from building a super balance

Drawdown starts with a balance you already have and removes income and fees over time. Enter the amount available in the account on 1 July, after any upfront withdrawals. Choose the annual amount you want to receive in the first year. The model increases that target with your inflation assumption each subsequent year.

This is a scenario calculator for an existing account. It does not add employer contributions, salary sacrifice or future savings. Those belong in the super accumulation calculator. It also does not determine whether you satisfy a condition of release or how much you can transfer into pension phase.

Australian account-based pension minimum drawdown rates

With minimums enabled, each financial year’s withdrawal target is the larger of your inflation-adjusted desired income and the minimum payment. The minimum uses your opening balance and age on 1 July, rounded to the nearest $10; a result ending in $5 rounds upward. For a $500,000 opening balance at age 65, the full-year minimum is $25,000.

The model assumes a full year from 1 July and uses the standard rates shown below throughout the projection. It does not prorate the first payment for a pension commencing later in the year, apply historical temporary reductions, or model a transition-to-retirement maximum. Check a partial-year minimum with your fund.

A withdrawal scenario: compare income before choosing a target

The examples below start with $500,000 at age 65 and model 35 years. They assume a 5% nominal return after investment tax but before entered fees, 2.5% annual inflation, 0.5% percentage fees and a $100 first-year fixed fee. Minimum pension withdrawals are enabled. These are illustrations from this model, not recommended withdrawal levels.

A higher target usually removes more capital earlier. A target below the pension minimum does not reduce the account’s withdrawal below that minimum. Money withdrawn above your spending needs leaves the account; any later saving, reinvestment or tax on that surplus is outside this model.

How withdrawals, fees and investment returns are applied

The scheduled annual withdrawal is split into 12 equal payments at the start of each month. The model then deducts one-twelfth of the annual percentage fee from the remaining balance and one-twelfth of the current fixed dollar fee. Growth applies to the balance left after those deductions. The monthly return is (1 + annual return) raised to 1/12, minus one, so it compounds to the annual assumption.

The percentage fee includes all balance-based fees you want to model. Include investment fees in that input only if the return you enter has not already had them deducted. Fixed dollar fees and desired withdrawals rise once per year with inflation. Actual payments and fees cannot exceed available funds.

The yearly table reconciles opening balance minus actual withdrawals minus fees plus investment growth to closing balance. The first-year monthly equivalent is the initial schedule; pension minimums and inflation can change it in later years. End balances are also divided by cumulative inflation to show their value in starting-year dollars.

What the lower-return comparison can and cannot tell you

The second chart line repeats the same withdrawals, minimums and fees with a constant annual return two percentage points lower. This makes the effect of one assumption visible. It is not a probability interval, a market forecast or a worst-case outcome.

Actual investment returns vary. Losses early in retirement can have a different effect from the same losses later because withdrawals reduce the capital available for recovery. A constant-return model does not capture that sequence risk. Future changes in tax, pension minimums and personal spending can also change the result.

The results include no Age Pension, spouse’s assets, other income, tax assessment, estate rules or guaranteed lifetime income. Review the desired income and fee assumptions against your own account statements and spending needs. An account projected to last beyond the selected horizon is not shown to last indefinitely.