We were super busy on Tuesday night with our heads buried deep amongst the 2022-2023 Federal Budget. While there was a small amount of something for most taxpayers, one of the anticipated announcements related to the continuation of the 50% reduction on superannuation pension drawdowns.
The Federal Government announced they will continue the extension of the current 50% decrease in the minimum superannuation pension payments until 30 June 2023. Whilst it’s difficult to describe this as a nation building policy but there will be many SMSF pension recipients quietly pleased that they can minimise their pension withdrawals for another year.
The below outlines the effect on self-funded retirees.
Age Min % until 30/6/2023 Min % after 1/7/2023
Under 65 2.0% 4.0%
65-74 2.5% 5.0%
75-79 3.0% 6.0%
80-84 3.5% 7.0%
85-89 4.5% 9.0%
90-94 5.5% 11.0%
95+ 7.0% 14.0%
These rules may allow you to draw a smaller amount from your superannuation account-based income stream if you choose. A reduced level of drawdown could help sustain your retirement savings for a longer period, but this would come at the cost of reduced income for you.