How an account-based pension works
An account-based pension (ABP) is the standard way to draw retirement income from your super in Australia. You convert your super balance into a pension account, choose how much to draw each year (above the age-based minimum), and the balance stays invested. Earnings inside a retirement-phase ABP are tax-free up to the Transfer Balance Cap (currently $2.0M (from 1 July 2026) for new pensions starting in 2026-27). At 60+ from a taxed fund, the payments themselves are also tax-free.
The minimum drawdown is set by regulation and rises with age: 4% if you're under 65, 5% from 65-74, 6% from 75-79, 7% from 80-84, 9% from 85-89, 11% from 90-94, and 14% from 95. The percentage is applied to your balance at 1 July each year. There is no maximum on a retirement-phase ABP — you can draw a lump sum or close it down anytime — which is the main practical difference between an ABP and the more constrained Transition to Retirement pension.
This calculator projects your balance forward year-by-year using your chosen drawdown rate (re-applying the minimum at each future age) and a constant net return assumption. For TTR-specific strategy benefits at age 60+ while still working, see the TTR Calculator. For Centrelink interaction in retirement, see the Age Pension Calculator.