When you start a Transition to Retirement income stream (a pension while you still work), there are certain minimum amounts to withdraw. The maximum amount is 10% of the account balance.
Depending on your age, you must withdraw a minimum amount from your Account based Pension each year. Due to the economic effects of COVID-19, the government has halved the percentage of minimum pension payments for the 2020, 2021, 2022 and 2023 financial years.
See the table below for percentages linked with different age categories:
| Age of recipient |
Percentage Factor (2020/2021/2022/2023) |
| Under 65 |
2% |
| 65 – 74 |
2.5% |
| 75 – 79 |
3% |
| 80 – 84 |
3.5% |
| 85 – 89 |
4.5% |
| 90 – 94 |
5.5% |
| 95 or more |
7% |
With the global financial crisis in 2009, the minimum percentages were lowered. This enabled Members to preserve more capital in the SMSF. The historical minimum percentages are set out below:
| Age |
Previous Year Percentage Factors |
|
2008 FY |
2009 -2011 FY |
2012-2013 FY |
2014-2019 FY |
| Under 65 |
4% |
2% |
3% |
4% |
| 65-74 |
5% |
2.5% |
3.75% |
5% |
| 75-79 |
6% |
3% |
4.5% |
6% |
| 80-84 |
7% |
3.5% |
5.25% |
7% |
| 85-89 |
9% |
4.5% |
6.75% |
9% |
| 90-94 |
11% |
5.5% |
8.25% |
11% |
| 95 or more |
14% |
7% |
10.5% |
14% |
1. The 4% minimum is the normal percentages that apply for minimum pension draw down
2. Minimum amount calculated on 1 July each year for the transition to retirement regular payment
3. In the first year of the account-based income stream, work out the minimum payment pro-rata on effective days in the year
4. Minimum amount to be rounded to nearest $10
5. These minimum amounts are set out in the Superannuation Legislation
To start a Pension or Transition to Retirement, Trustees need to minute this decision. Please see a template of a pension commencement minute below
