How long will an allocated pension last?

It depends far more on what you draw than on what you start with. $500,000 drawing $40,000 a year from age 67 runs out at age 84, 17 years after it starts, at ASIC's 6.7% Balanced pension return with its fees and with the income rising each year to keep its buying power. Enter your own numbers above. That figure excludes the Age Pension, which most retirees receive in part or in full long before their account runs out.

What is the difference between an allocated pension and an account based pension?

Nothing. They are two names for the same product. "Allocated pension" is the older term and "account-based pension" came in with the 2007 simplified-super changes, and funds still use both. The rules are identical: a legislated minimum payment each year, no maximum, tax-free earnings in the retirement phase, and a lifetime cap on how much can be moved in.

What is the minimum drawdown on an allocated pension?

It is set by your age and your 1 July balance: 4% under 65, 5% 65 to 74, 6% 75 to 79, 7% 80 to 84, 9% 85 to 89, 11% 90 to 94, 14% 95 and over. On $500,000 at age 67 that is $25,000 for the year. These are the standard rates — the halved rates that applied from 2019-20 to 2022-23 ended and have not been extended. Your fund rounds the calculated minimum to the nearest $10 and pro-rates it in the year the pension starts.

Is there a maximum I can withdraw from an allocated pension?

No. You can withdraw as much as you like from an account-based pension, including the whole account. The 10% maximum people have in mind applies to a transition to retirement income stream, which is a different thing — it is what someone over preservation age who is still working can start, and it is not in the retirement phase.

Are earnings in an allocated pension tax-free?

Yes, once the account is in the retirement phase. The fund pays no tax on the investment earnings on that money, where it would pay 15% on the same earnings in an accumulation account. That exemption is why ASIC assumes 6.7% a year for a Balanced pension against 6.1% for the same option before retirement. A transition to retirement pension does not get the exemption.

Do I pay tax on allocated pension payments?

From age 60, payments from a taxed fund are non-assessable non-exempt income — no tax, not in your tax return, and they do not push your other income into a higher bracket. That is why this calculator projects gross payments. Between preservation age and 60 the taxable component is assessable at your marginal rate with a 15% tax offset, though in practice preservation age reached 60 for everyone born from 1 July 1964, so nobody starting a pension now is below 60. Payments from an untaxed element, which some public sector schemes have, are taxed differently.

Does this include the Age Pension?

Not by default, and it is a toggle rather than an omission. Switch it on in the panel and both means tests are re-run every year on that year's balance, so the estimated entitlement rises as the account falls. On $500,000 drawing $40,000 a year, a single homeowner would receive about $865,968 of Age Pension over the projection in today's dollars. Only Services Australia can assess an actual entitlement.

Allocated Pension Calculator

Q: What is the transfer balance cap for 2026–27?

$2,100,000. It is a lifetime limit on how much super you can move into retirement-phase accounts, indexed to CPI in $100,000 steps. Your personal cap is set by the general cap in the year you first start a retirement-phase income stream and reduced by what you have already transferred, so it can be lower than the current general figure. Money above your cap can stay in accumulation, where its earnings are taxed at 15%.

$500,000 in an allocated pension, drawing $40,000 a year from age 67, runs out at age 84, 17 years after it starts — at ASIC’s own 6.7% return assumption for a Balanced pension, with its fees, and with the income rising each year so it keeps its buying power. Change any of it below.

An allocated pension is the older name for an account-based pension, and the two mean the same thing. This calculator models the three rules that make it different from simply drawing down a balance: you must withdraw at least the legislated minimum for your age each year, there is no maximum, and the fund pays no tax on the account’s earnings. The projection is shown in today’s dollars.

Your pension details

The balance you are moving into the pension and the income you want to draw, in today’s dollars

Balance moved into the pension

Your age now

Project to age

Income you want each year

In today’s dollars. If this is below the legislated minimum for your age, the minimum is paid instead.

Age Pension

Include the Age Pension. It is means tested, so the estimated entitlement rises as your balance falls and the pension account only has to fund the gap. Off by default, so the headline figure is about the pension account itself.

Assumptions you can change

Investment return (% a year)

Inflation (% a year)

Percentage fee (% a year)

Administration fee ($ a year)

Raise the payment each year so it keeps its buying power. Turn this off to hold the payment flat in future dollars, which makes the account last longer on paper and buy less every year.

How long the pension account lasts

Runs out at age 84

Drawing $40,000 a year in today's dollars from age 67, the account is exhausted at 84 — 17 years.

Minimum you must withdraw at 67: 5% = $25,000
Maximum: None
Total paid to you, in today’s dollars: $682,921
Total fees over the projection: $10,955

Shown in future dollars. At 2.5% inflation, $4,499 in 17.5 years buys about $2,921 of today's goods. That is the last payment the account makes, and it is a larger number than the first one only because it has been raised with inflation.

What the tax-free earnings are worth

A retirement-phase account pays no tax on its earnings. The same balance, the same income and the same return with earnings taxed at 15% — which is what an accumulation account or a transition-to- retirement pension does — runs out at 82, 2 years earlier. The fund would have paid $46,987 of tax on earnings over that time.

Year by year

Opening balance plus earnings, less the payment and the fees, equals the closing balance. The minimum column is the legislated figure for that age, from the balance at the start of the year. There is no earnings-tax column because a retirement-phase account pays none.

Age	Opening	Minimum	Paid to you	Earnings	Fees	Closing	Closing, today’s $
67	$500,000	5% · $25,000	$40,497	$32,165	$741	$490,928	$478,954
68	$490,928	5% · $24,546	$41,509	$31,524	$729	$480,214	$457,074
69	$480,214	5% · $24,011	$42,547	$30,772	$715	$467,724	$434,328
70	$467,724	5% · $23,386	$43,611	$29,900	$699	$453,315	$410,681
71	$453,315	5% · $22,666	$44,701	$28,899	$680	$436,833	$386,097
72	$436,833	5% · $21,842	$45,819	$27,758	$658	$418,115	$360,539
73	$418,115	5% · $20,906	$46,964	$26,466	$633	$396,984	$333,969
74	$396,984	5% · $19,849	$48,138	$25,011	$604	$373,253	$306,346
75	$373,253	6% · $22,395	$49,342	$23,382	$572	$346,721	$277,630
76	$346,721	6% · $20,803	$50,575	$21,564	$536	$317,174	$247,775
77	$317,174	6% · $19,030	$51,839	$19,542	$496	$284,380	$216,739
78	$284,380	6% · $17,063	$53,135	$17,302	$451	$248,095	$184,473

What this projection assumes

This calculator estimates how long an account-based (allocated) pension lasts, from the balance you start with and the income you want to draw. It applies the legislated minimum payment for your age, the fact that a retirement-phase account pays no tax on its earnings, and the fees, and shows the result in today's dollars. It is a general illustration of how those pieces interact — it is not advice, it is not tailored to you, and it is not a forecast of what your account will actually do.

Assumptions

Investment return6.7% a year You can change this: ASIC's Moneysmart account-based pension calculator assumes 6.7% a year for a Balanced option in the retirement phase, from the Willis Towers Watson Global Asset Model outlook as at June 2026. It is higher than the 6.1% that calculator assumes while you are still working, because a retirement-phase account pays no tax on its earnings. Returns swing about year to year and can be negative; one average rate cannot show that. Source
Tax on the fund's investment earningsNone — retirement phase is exempt Set by law: Once your super is in a retirement-phase account, the fund pays no tax on the earnings it makes on that money. That is the difference between this and an accumulation account or a transition-to-retirement pension, where earnings are taxed at 15%. It is also why the return assumption above is higher than the one used before retirement. Source
Minimum you must withdraw5% at age 67 Set by law: Set by Schedule 7 of the SIS Regulations from your age and your 1 July balance, and it rises in bands as you get older — 4% under 65 through to 14% from 95. It is not optional: the projection pays at least this much every year even where your income target is lower, because the law requires it. The percentages the ATO publishes are flagged indicative, and the exact minimum is rounded to the nearest $10 and pro-rated in the year the pension starts. Source
Inflation used to show today's dollars2.5% a year You can change this: The rate ASIC requires a superannuation projection to use for someone in the retirement phase. It is CPI rather than the higher wage-inflation figure used during working life, because what matters once you have stopped working is what your income buys, not how it compares with other people's pay. Source
Your income keeps pace with inflationYes — the payment rises each year You can change this: The default raises the payment each year so it keeps the same buying power. Held flat instead, a payment loses about a quarter of its value over ten years at this inflation rate, so the account appears to last longer than it usefully does. Source
Percentage fee on your balance0.14% a year You can change this: ASIC's default indirect cost assumption for a pension account, from an independent actuarial review of the APRA quarterly superannuation product statistics as at March 2026. Your own fund's product disclosure statement has the real figure — put it in. Source
Dollar administration fee$69 a year in today's dollars You can change this: ASIC's default pension administration fee, from the same APRA-derived review, raised each year with inflation so it does not quietly shrink to nothing over a long projection. Source
When money movesPayments and fees mid-year Set by law: Pension payments are made through the year, so the model treats them as paid on average at mid-year and the balance earns a return for the other half. This is the convention ASIC's own account-based pension calculator uses, which is what lets the two be compared. Source
How far ahead this projectsTo age 100 You can change this: Long enough that the answer is not an artefact of where the chart stops. Living longer than your money is the risk this calculator exists to show, so it keeps going past any reasonable life expectancy rather than ending at one. Source
Age PensionNot included You can change this: Left out by default so the figure above is about the pension account itself. Most retirees receive some Age Pension well before their super runs out, and because it is means tested the entitlement rises as the balance falls — so the account lasting to a given age understates how long the income does. Turn it on to see the difference. Source
Transfer balance cap$2,100,000 (2026–27) Set by law: The lifetime limit on how much super can be moved into a retirement-phase account. It is indexed to CPI in $100,000 steps. Anything above the cap can stay in an accumulation account, where its earnings are taxed at 15%. Source

What it does not do

This is a model, not a prediction. It assumes the same return every year. Real returns swing about and can be negative, and a bad run in the first few years — while the balance is at its largest — does far more damage than the same run later on.
It models one account-based pension account. It does not describe a defined benefit pension, a lifetime annuity or a market-linked pension, all of which work differently.
The minimum payment is worked out from the exact percentage for your age band. The law rounds the calculated minimum to the nearest $10 and pro-rates it in the year the pension starts, and the ATO flags its own published percentages as indicative — so your fund's figure will differ slightly from this one.
Where the legislated minimum forces out more than you wanted to spend, the surplus is counted but not reinvested. Real money leaving super can be invested outside it, so the total you end up with is understated rather than overstated — but earnings outside super are taxable in your hands, which this does not model either.
It does not model tax on your pension payments. From age 60 payments from a taxed fund are non-assessable non-exempt income, so for almost everyone there is none. Payments from an untaxed element — some public sector schemes — are taxed, and so is a death benefit income stream paid to someone who is not a tax dependant.
It does not model commuting part of the pension to a lump sum, adding money to the account (which is not allowed once an income stream has started), or moving between funds.
Do not use this to decide about a particular super fund or pension product. If you want advice on your own circumstances, speak to someone licensed to give it.
The Age Pension is not included. Because it is means tested, the entitlement rises as your balance falls, so most people's income lasts considerably longer than their pension account does. Switch the Age Pension on above to see the difference on your own numbers.

This is a generic calculator, not advice about any particular superannuation fund, pension or income stream product, and it is not tailored to your circumstances. Do not use it to decide about a specific product. If you want advice on your own situation, speak to someone licensed to give it. We rely on ASIC Corporations (Superannuation Calculators and Retirement Estimates) Instrument 2022/603 for this calculator. You can print or save these results using the buttons above.

Account based pension calculator: the same thing, newer name

“Allocated pension” and “account-based pension” describe one product. The name changed with the 2007 simplified-super reforms and both are still in use, so a fund may call your account either. Nothing about the rules differs: the same Schedule 7 minimum, the same absence of a maximum, the same tax-free earnings in the retirement phase.

What it is not is a guarantee. Unlike a defined-benefit pension or a lifetime annuity, an allocated pension runs until the account is empty, so how long the income lasts depends on what you draw and on what the investments do. Whatever is left passes to your estate or your nominated beneficiary. That is the trade-off in both directions, and it is the reason this page is a projection rather than a promise.

Why a retirement-phase pension lasts longer than an accumulation account

While you are still working, your fund pays 15% tax on the earnings it makes on your balance. Once that money is moved into a retirement-phase account, it pays nothing. That is why ASIC assumes 6.7% a year for a Balanced pension option and only 6.1% for the same option while you are working — the underlying investments are similar, and the difference is the tax.

On the case above it is worth years, not decimal points. The same balance, the same income and the same return with earnings taxed at 15% runs out at 82, 2 years earlier, with $46,987 paid in fund tax along the way. This is also the single most misunderstood point about a transition to retirement pension: a TTR income stream is not in the retirement phase, so its earnings are still taxed at 15%.

Minimum drawdown rates by age (2026–27)

Once an allocated pension has started, a minimum amount must be paid to you each year. It is worked out from your age and your balance on 1 July, and it rises in bands. These are the standard percentages, which have applied since 2023–24 — the halved rates from the COVID years ended after 2022–23. The dollar figures are $500,000, the balance entered above.

Age	Minimum percentage	On $500,000
Under 65	4%	$20,000
65 to 74	5%	$25,000
75 to 79	6%	$30,000
80 to 84	7%	$35,000
85 to 89	9%	$45,000
90 to 94	11%	$55,000
95 and over	14%	$70,000

There is no maximum on an allocated pension — you can draw the whole account in a year if you want to. A transition to retirement pension uses these same minimums but adds a 10% ceiling. The percentages the ATO publishes are flagged indicative: your fund rounds the calculated minimum to the nearest $10 and pro-rates it in the year the pension starts.

The transfer balance cap limits what you can move in

Tax-free earnings are not unlimited. The general transfer balance cap is $2,100,000 for 2026–27, and it is a lifetime limit on how much super you can move into retirement-phase accounts. It is indexed to CPI in $100,000 steps, which is why it moves some years and not others.

Your own cap can differ from the general one. It is set by the general cap in the year you first start a retirement-phase income stream, and it is then reduced by what you have already transferred, so someone who started a pension in an earlier year has a lower cap than the current figure. Anything above the cap does not have to be withdrawn — it can stay in an accumulation account, where its earnings are taxed at 15%.

The Age Pension changes the answer, and it is off by default

The figure at the top is about the pension account, not about your income. The Age Pension is means tested, so as the balance falls the estimated entitlement rises to meet it, and the account only ever has to fund the gap between what you spend and what you receive. Two effects then compound: a smaller withdrawal preserves the balance, which is drawn down more slowly.

On the same $500,000 drawing $40,000 a year, a single homeowner counting the Age Pension would receive about $865,968 of pension over the projection in today’s dollars, and the account lasts the whole projection instead of runs out at age 84, 17 years after it starts. It is off by default because the headline question is about the product and because including it needs your relationship status, your home ownership and your other assets. Switch it on in the panel above, or use the Age Pension calculator for both means tests in full. Only Services Australia can assess an actual entitlement.

How to Use This Calculator

1Enter the balance you are moving into the pension account
2Enter your age now and the income you want each year, in today's dollars
3Adjust the return, the fees and the inflation rate to your own fund's figures
4Switch the Age Pension on if you want your income rather than just the account
5Read the year-by-year table to see which years the legislated minimum forces a larger payment than you asked for

What is an allocated pension?

An allocated pension — now more often called an account-based pension — is a retirement income stream you start by moving super into a pension account. You draw a regular income from it, the rest stays invested, and the fund pays no tax on the earnings while it is in the retirement phase. For anyone 60 or over drawing from a taxed fund, the payments are not assessable income either.

It is not a guaranteed income. The account runs until it is empty, so how long it lasts depends on what you draw and what the investments return. What is left when you die passes to your beneficiary or your estate.

Two limits shape it. You must withdraw at least the legislated minimum for your age each year, from your 1 July balance. And there is a lifetime cap on how much you can move into retirement phase in the first place.

What moves the answer most

What you draw: The input the result is most sensitive to, and the one you control. Drawing more than the account earns means the balance falls from the first year.
The tax-free earnings: A retirement-phase account pays no tax on its earnings, unlike an accumulation account or a TTR pension. On a long projection that is worth years of income, not decimal points.
The legislated minimum: From 4% under 65 up to 14% 95 and over. In later years it can force out considerably more than you want to spend, which a plain drawdown projection does not show.
Fees: A percentage of the balance plus a dollar amount, every year, whether the investments go up or down. Your fund's product disclosure statement has your real figures.
The order of returns: A single average rate cannot show sequencing risk. A poor run in the first few years, while the balance is at its largest, does far more damage than the same run later.

Frequently Asked Questions

Official Sources

Rates checked against the ATO — verified 27 July 2026

Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.

Rates and thresholds last updated for the 2026–27 financial year.

About this calculator

This calculator exists to show you the arithmetic. It applies published Australian rates, thresholds and formulas to the numbers you enter and shows the working, so you can check it. That is all it does — it produces a number and describes what the number is. It does not recommend anything and it holds no opinion about any financial product.

What can move this result

It only knows the figures you type in. Offsets, deductions, prior-year losses, other income, your partner's position and anything you have not entered are not in the result, and any of them can move it a long way.
Rates and thresholds change, sometimes mid-year and occasionally with retrospective effect. Each calculator shows the financial year and the verification date it is working from — outside that year the result is wrong rather than approximate.
Assumptions are set to a reasonable default and every non-statutory one can be changed. Defaults are not predictions, and a small change to a growth or inflation assumption compounds into a large change in a long projection.
Where a result reaches two or more years into the future it is shown in today's dollars as well as future dollars, because a future-dollar figure overstates what the money will actually buy.
It is a generic calculator. It is not built around any particular product, it does not compare the market, and it cannot tell you whether a product is suitable for you.

This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.

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