Retirement offers an exciting new chapter in life — but it also often brings a range of financial decisions that aren’t always straightforward. Daniel and Emma recently reached out to Retirement Essentials for much-needed assistance.. Their meeting with adviser Andrew Dunkerley gave them clarity, confidence, and a practical plan for their retirement income needs.
As the end of the financial year approaches, it’s a timely reminder for anyone drawing an income from an Account-Based Pension (ABP) to double-check they’ve met their minimum annual withdrawal requirement.
ABPs are a key tool for providing tax-effective income in retirement. But they come with rules — and missing a key one can have unintended tax or compliance consequences. Many Retirement Essentials members have shared questions about how it all works, so we’ve included answers to these questions to help clarify common concerns.
Understanding minimum annual withdrawal requirements
Each year, individuals with an ABP must withdraw a minimum percentage of their balance. This is calculated based upon their age and their ABP account balance as at 1 July of that financial year. (i.e the balance at 1 July 2024 is the one being used to calculate this amount for this financial year which ends on 30 June.) These percentages are designed to gradually draw down retirement savings over time.
For example, someone aged 65–74 must withdraw at least 5% of their ABP balance; this increases to 6% once they turn 75.
A little-known fact:
It’s important to note that lump sum withdrawals don’t count towards satisfying the minimum. The required payment must come from your ABP as an income stream.
Retirement is a major life milestone—often exciting, but sometimes uncertain. Superannuation, Account-Based Pensions (ABPs), investments and spending plans all have moving parts, and working out how they fit together can feel overwhelming.
That’s when some professional guidance and support can make all the difference. Today we highlight how Retirement Essentials’ adviser, Nicole Bell, has helped members, Mei and David to build clarity and confidence about the road ahead.