The minimum annual amount of income payments you must take from account based income streams is based on your age, as outlined in the table opposite.
Let’s say, you have $300,000 in your account based pension at age 60, which has a minimum of 4% drawdown and it is invested in cash earning 5%. As you are withdrawing less than the annual earnings, your account balance will continue to increase slightly.
If however you took a higher amount than the minimum, say $30,000 pa, the amount of income withdrawn would be greater than the annual earnings and accordingly your account based pension balance will be depleted in around 15 years.
Please note: The Government has temporarily reduced minimum drawdown requirements for account-based pensions and similar products by 50% for the 2019–20 financial year, which has been extended to the 2021-22 and 2022-23 financial years as well.