Retirement Drawdown Projection (Pro) Australia

What the drawdown projection does

The Retirement Drawdown Projection takes a starting balance and an annual income indexed to inflation, then traces that balance forward year by year until either the money runs out or your projection horizon is reached. Each year the balance earns its return, the withdrawal is taken, and the remainder carries into the next year with the withdrawal lifted by inflation.

This is a Pro, server-side tool. The full year-by-year schedule is generated behind the access gate; the headline figure is how long the balance lasts.

Why the withdrawal has to grow

A fixed dollar income shrinks in real terms every year. Holding your drawdown at $50,000 for two decades means accepting a steadily falling standard of living, so the projection lifts the withdrawal by your inflation assumption each year to keep the buying power roughly level.

That realism has a cost. A rising withdrawal depletes the balance faster than a flat one, and the point at which withdrawals overtake investment returns arrives sooner. The schedule makes that crossover visible, which is more useful than a single headline number, because it shows you how much room you have before the balance starts falling quickly.

The minimum drawdown is not optional

This is the part where an Australian plan diverges from a generic projection, and it is worth checking your inputs against.

An account-based pension carries a legislated minimum annual payment, expressed as a percentage of the account balance on 1 July and rising with age. It is 4 per cent below 65, 5 per cent from 65 to 74, 6 per cent from 75 to 79, 7 per cent from 80 to 84, 9 per cent from 85 to 89, 11 per cent from 90 to 94, and 14 per cent from 95.

Two consequences follow. First, the minimum is a percentage of a moving balance, not a fixed sum, so it falls in dollars when markets fall, the opposite of the inflation-indexed dollar amount this tool models. Second, at advanced ages the required percentage can exceed what you actually want to spend. A 90-year-old with a $400,000 balance must draw at least $44,000 whether or not that is the plan. Money drawn above your spending needs is not lost, but it leaves the concessionally taxed pension environment and the earnings on it are then taxed in your own hands.

If your projection has you drawing far less than the minimum for your age, the projection is not describing what will actually happen.

Withdrawals you can actually spend

The figure you enter needs no gross-up for tax in most cases. Income stream payments from a taxed super source are generally received tax-free once you are 60 or over, which is a genuine Australian advantage and quite different from countries where a drawdown figure is a pre-tax number and the spendable amount is materially lower.

Two qualifications. Money held outside super, in a bank account or a share portfolio, is taxed normally, so a plan drawing from both sources is not uniformly tax-free. And the transfer balance cap limits how much can be moved into the retirement phase where fund earnings are exempt. The general cap is $2,100,000; anything above it stays in accumulation phase, where earnings are taxed, so a very large balance is not all operating under the same rules.

What the Age Pension does to the shape of the plan

A projection that ends with a balance of zero looks alarming, and in Australia it overstates the problem, because the Age Pension is means-tested and moves in the opposite direction to your balance.

The assets test works on a threshold and a taper. A single homeowner can hold $333,000 in assessable assets before the pension begins to reduce; a single non-homeowner $600,000, the difference reflecting the fact that the family home is not assessed at all. For couples the thresholds are $499,000 as homeowners and $766,000 otherwise. Above the threshold, the pension reduces by $78 a year for every $1,000 of assets.

Read that taper backwards and it becomes the important fact for a drawdown plan: every $1,000 you spend down increases your Age Pension entitlement by $78 a year. The maximum single rate of Age Pension is $32,180.20 a year from 20 September 2026, and a couple's combined maximum is $48,516. A retiree whose super balance is falling is walking into a rising government income, so the total income line is far flatter than the balance line the projection draws.

The income test runs alongside it, using deeming: financial assets are assumed to earn 1.25 per cent up to $66,800 for a single person and $110,600 for a couple's combined financial assets, and 3.25 per cent above that, regardless of what they actually earn. Whichever test produces the lower pension is the one that applies. None of this is in the calculator, which models the super balance alone.

The inputs that decide the answer

• Starting balance: the base everything else works against
• Annual withdrawal: the most direct lever and the one you control
• Return: stronger returns extend the balance, weaker ones shorten it
• Inflation: raises the withdrawal every year and compounds

These interact, so a small change in two of them at once can move the depletion year considerably. Test a range rather than trusting one run.

Walking through the first two years

Start with $800,000 and draw $50,000 in the first year, assuming a 5 per cent return and 2.5 per cent inflation. In year one the balance grows to $840,000, the withdrawal takes it to $790,000, and next year's withdrawal rises to $51,250. Early on the return more than covers the draw and the balance can hold or even edge up. As the indexed withdrawal grows it eventually overtakes the return, and from that point the balance falls at an accelerating pace. The schedule shows exactly where that turning point sits, which is the most decision-relevant thing in the whole output.

Sequence risk and building a margin

Returns do not arrive evenly, and the order matters. A poor first few years, while the balance is at its largest and you are drawing from it, does damage that a strong decade afterwards cannot fully repair. This is sequence-of-returns risk and a steady-return model cannot show it.

The practical responses are all about flexibility rather than precision. Hold a cash or defensive bucket covering a couple of years of drawings so you are never forced to sell growth assets after a fall. Be willing to ease spending in weak years. And plan against a return assumption you would be comfortable being wrong about. A projection that survives only on the optimistic run is fragile no matter how neat the schedule looks.

Revisit the numbers each year as markets, your spending and your Age Pension position change. For decisions about your actual super, pension strategy and entitlements, confirm the figures with a licensed financial adviser who can account for your full situation.

This is general information only and not financial advice.

About This Retirement Drawdown Calculator

Use this retirement drawdown calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.