Federal Government’s second support package announced on March 22 offered assistance for self-funded retirees.

Minimum drawdown rates for account-based pensions and similar products will be halved for the 2020 and 2021 financial years. This means retirees will be under less pressure to sell shares or other pension assets in a falling market to meet the minimum payments they are required to withdraw each financial year.

The new rates are in the table below:

Age of member Default minimum drawdown rates Minimum drawdown rate for the 2019-20 and 2020-21 income years
Under 65 4% 2%
65-74 5% 2.5%
75-79 6% 3%
80-84 7% 3.5%
85-89 9% 4.5%
90-94 11% 5.5%
95 or more 14% 7%

Contact the Centaur Financial team if you’d like to discuss what these changes will mean for your income in retirement.

Information in this article has been sourced from the Treasury website: https://treasury.gov.au/sites/default/files/2020-03/factsheet6providingsupportforretireestomanagemarketvolatility-25march2.pdf

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