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 as you are withdrawing more than the annual earnings, your account based pension balance will be depleted in around 15 years.
Please note: The Government is temporarily reducing minimum drawdown requirements for account-based pensions and similar products by 50% for the 2019–20 and 2020–21 financial years. This has been extended to the 2021-22 financial year as well.