← Knowledge baseSpending & withdrawal

Drawdown order & the minimum drawdown

In retirement the planner spends outside-super savings before super (it's more tax-efficient), after taking the legislated minimum super drawdown.

The mandatory minimum

Once super is in a tax-free account-based pension, the ATO requires you to withdraw a minimum each year — 4% of the balance under 65, stepping up with age (5% at 65–74, 6% at 75–79, and higher later). You can always take more; you just can't take less.

Then: outside-super first

After the mandatory minimum, the planner funds the rest of your spending from outside-super savings before super. Why? Super's earnings in pension phase are tax-free, so it's the most valuable place to keep money compounding — you spend the taxed money first. If a minimum super withdrawal is more than you need to spend, the surplus is simply reinvested into your outside savings.

This ordering is means-test-neutral (both super and outside savings are assessable once you're 67), so it improves after-tax outcomes without changing your Age Pension.

Try it — worked examples

Related concepts

See it in your own plan

Model your super, the Age Pension and how long your money lasts — free, in today's dollars.

Open the planner