By Paul Feeney, Founder and Chief Executive Officer, Otivo
One of the quiet advantages of an account-based pension is how much you can change your mind. People often assume that once they set a retirement income, they're locked into it. In fact the amount, the timing, and the occasional top-up are all adjustable, with just one floor beneath you. Here's what you can change about your pension income, and what you can't.
Quick answer
Yes, an account-based pension is flexible. You can generally increase your regular income, take one-off lump sums, or change how often you're paid, as long as you draw at least the age-based minimum each year. As at July 2026, that minimum starts at 4% of the balance for those under 65 and rises with age.
Can you adjust your pension income?
Yes, and more freely than many retirees expect. With an account-based pension you can generally raise or lower your regular payments, change the frequency, and take extra amounts when you need them, all through your fund. The one rule you can't bend is the annual minimum. Above that floor, the income is yours to shape around your circumstances, which is one of the features that makes an account-based pension so adaptable through a long retirement.
What is the minimum you must withdraw?
The minimum is set by your age and is the one figure you can't go below. It starts at 4% of your balance a year for those under 65 and rises through the older age bands, reaching higher percentages later in life. The rule exists so super is actually drawn down as retirement income rather than held indefinitely. Everything above that minimum is flexible, but the minimum itself must be met each financial year, and the ATO publishes the current rates by age.
Can you take extra or one-off amounts?
Generally yes. Beyond your regular payments, you can usually take one-off lump sum withdrawals from an account-based pension when a larger need arises, subject to your balance. That means you're not locked into a fixed monthly figure for everything, the steady income covers the everyday, and the ability to draw extra handles the occasional big expense. It's this combination of regular and one-off that gives the account real flexibility.
Why might you change your withdrawal amount?
Life rarely runs at a constant rate, and neither does spending. In a weak market year some retirees choose to draw closer to the minimum to protect their balance, while a year with a major expense might call for more. Changes in health, housing or lifestyle can all shift what you need. For someone like a 72-year-old facing a one-off home repair, the ability to lift withdrawals briefly and then return to normal is exactly the kind of flexibility the account is built for.
Are there limits or downsides to changing it?
A couple worth keeping in mind. You can't draw below the age-based minimum, and drawing well above a sustainable rate depletes your balance faster, which shortens how long the income lasts. Larger withdrawals can also affect Age Pension entitlements depending on what you do with the money, since assets are tested, so it's worth understanding that in general terms. Within those bounds, though, the flexibility is genuinely wide.
Frequently asked questions
Can I reduce my pension payments?
Yes, down to the age-based minimum for your age, but not below it. Reducing payments towards the minimum is a common way retirees protect their balance in weaker years.
Can I take a lump sum from my pension?
Generally yes. Most account-based pensions allow one-off lump sum withdrawals on top of your regular income, subject to your balance, which is useful for larger or unexpected costs.
Is there a maximum I can withdraw from my account-based pension?
There's no fixed maximum above the minimum, so the real limit is your balance and how long you need it to last. Drawing heavily depletes the account faster, which is the main constraint.
Where to from here
The flexibility is one of the account's best features, provided you use it deliberately. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a retirement planning module that shows how different withdrawal levels affect how long your income lasts, based on your balance, age, spending and Age Pension eligibility. It helps you flex your income without losing the plot.
Sources
- Australian Taxation Office — account-based pension minimum drawdown and lump sums — ato.gov.au
- ASIC MoneySmart — changing your retirement income — moneysmart.gov.au
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.