TTR Minimum & Maximum Drawdown Rates: 2026–27 Rules

A transition to retirement pension sits between two annual limits: a minimum you generally have to take, and a 10 percent maximum you cannot exceed while the pension remains a TTR.

The relevant balance is not always the account balance at 1 July. That figure is the usual starting point for a pension that already existed on 1 July. In the year you start the pension, the calculation uses commencement-day information instead.

If you are new to the broader rules, start with the transition to retirement pension guide. To estimate a payment against a salary and super balance, use the Transition to Retirement Calculator.

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The minimum withdrawal rule

A TTR pension uses the same minimum pension percentages that apply to standard account based pensions.

For a pension that already exists at the start of the financial year, the percentage is set by your age at 1 July:

• Under 65: 4%
• 65 to 74: 5%
• 75 to 79: 6%
• 80 to 84: 7%
• 85 to 89: 9%
• 90 to 94: 11%
• 95 or more: 14%

You generally must receive at least one payment in the financial year that brings the total up to that minimum.

Turning 65 during the year does not lift that year's minimum from 4 percent to 5 percent on your birthday. For an existing pension, the age used is the age at 1 July. The 5 percent rate applies from the following 1 July. That timing is covered in more detail in what happens to a TTR at age 65.

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Existing pension versus commencement year

Existing pension at 1 July. Use the 1 July account balance and your age on that date. The 4 percent or 10 percent amounts are then set for the whole financial year.

Pension commenced during the year. First-year calculations use the information on commencement day: the starting balance and your age at commencement. The minimum is generally pro-rated for the number of days remaining in the financial year.

Commencement on or after 1 June. No minimum pension payment is required for that first financial year. The 10 percent maximum still needs to be observed.

The maximum is a separate cap. Starting in January does not automatically cut the 10 percent limit in half.

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The 10 percent maximum rule

While a TTR is not in retirement phase, you cannot withdraw more than 10 percent of the relevant pension account balance each financial year.

For an existing pension, that is generally 10 percent of the 1 July balance. In the commencement year, it is 10 percent of the commencement-day balance.

The 10 percent cap does not vary with age. It applies even if you would prefer a larger income. Lump sum withdrawals remain restricted until a full condition of release applies.

This cap is one of the main differences between a TTR and a standard retirement-phase account based pension.

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Full financial year example

Assume the pension already existed on 1 July 2026.

• Age at 1 July 2026: 62
• TTR account balance at 1 July 2026: $400,000
• Minimum at 4 percent: $16,000
• Maximum at 10 percent: $40,000

During FY2026–27 the person must take at least $16,000 and cannot take more than $40,000. Those two numbers are fixed for the year even if the account balance later rises or falls with markets.

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Mid-year commencement example

Now assume the same person starts the pension on 1 October 2026, rather than having it in place on 1 July.

• Age at commencement: 62
• Starting TTR balance on 1 October 2026: $400,000
• Days remaining in FY2026–27 from 1 October to 30 June: 273 (2026 is not a leap year, so the year has 365 days)
• Full-year 4 percent minimum: $16,000
• Pro-rated minimum: $16,000 × 273 / 365 = $11,967 (rounded to the nearest dollar)
• 10 percent maximum on the commencement-day balance: $40,000 (not pro-rated)

If instead the pension commenced on 1 June 2027, no minimum payment would be required for FY2026–27. The 10 percent maximum would still apply to the commencement-day balance.

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What happens if the minimum is not met?

If the required minimum is not paid in a financial year, the pension may be treated as having failed to meet the payment standards for that year.

That can affect the tax treatment of the pension and, once the pension is in retirement phase, whether the fund can claim exempt current pension income for the relevant period. In an SMSF, the trustee is responsible for monitoring this.

The precise tax outcome depends on the facts and the fund's circumstances. It is not a single automatic penalty that applies in every case.

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What happens if you exceed the 10 percent maximum?

If the maximum annual pension payment is exceeded while the pension is supported only by preserved or restricted non-preserved benefits, the pension may fail to meet superannuation law requirements.

Depending on the circumstances, the pension can be treated as having ended for tax purposes, and amounts paid can be treated as lump sums rather than pension payments. Lump sums can be taxed differently, including at marginal rates without pension tax offsets.

It is not simply a matter of “paying the extra back.” The consequence depends on the payment, the components of the benefit and the fund's administration. Get the fund or a tax adviser to confirm the treatment rather than assuming a standard outcome.

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Why the limits exist

The TTR rules were designed to provide a limited income stream while a person is still working, not unrestricted early access to super. The 10 percent cap is the main expression of that policy.

Once a full condition of release with nil cashing restrictions applies, including turning 65, the maximum falls away and the pension is treated as a retirement-phase account based pension. See what happens to a TTR at age 65.

Withdrawal amounts also change the tax and contribution maths of a salary-sacrifice TTR. That interaction is explained in tax on a transition to retirement pension.

If you want the payment limits applied to a salary and super balance, the Transition to Retirement Calculator estimates the 4 percent and 10 percent amounts as part of each strategy comparison.

If you want those limits checked as part of a retirement income plan, I can help through my retirement planning service.

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FAQs

What is the minimum withdrawal for a TTR pension?

For an existing TTR, the minimum follows the standard account based pension percentages based on your age at 1 July. Under 65 that is 4 percent. In the commencement year the calculation uses commencement-day information, and no minimum applies if the pension starts on or after 1 June.

What is the maximum withdrawal from a TTR pension?

While the pension remains a TTR, you cannot withdraw more than 10 percent of the relevant pension account balance each financial year. For an existing pension that is generally the 1 July balance. In the commencement year it is based on the commencement-day balance.

What happens if you exceed the 10 percent TTR limit?

If the 10 percent maximum is exceeded in certain circumstances, the pension may fail to meet superannuation law requirements. Depending on the facts, that can change the tax treatment of payments. The exact consequence depends on the fund and the payment, so it should be checked rather than assumed.