The minimum drawdown rate for super members with an account-based pension will return to normal in the new financial year. The minimum was temporarily halved four years ago to shield members' super balances from falling markets and pandemic-induced uncertainty.
If you are between 65 and 74, your annual pension rate will go from 2.5% to 5% on July 1 (see table). The drawdown rate also increases as you get older. For instance, if you are 95 or older, the minimum is 14%.
Fortunately, super funds take care of these changes and update their members accordingly, either by email or letter. They will also ask whether you want to alter the payments to withdraw more.
Funds calculate your minimum drawdown amount each year based on your super balance at July 1.
"Members won't know the exact amount of the minimum drawdown before July 1," says Craig Sankey, head of technical services and advice enablement at Industry Fund Services. "The fund will ask them if they want to change their income payments. If you don't respond, they'll automatically bring you up to the new minimum."
Consider tax rates
This story is from the July 2023 edition of Money Magazine Australia.
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This story is from the July 2023 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
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