📅 Age Pension rates (FY 2025-26): $29,754/yr single · $44,856/yr couple combined · Eligibility from age 67 · Subject to assets and income tests.
Withdrawal rates in retirement
The withdrawal phase of FIRE is just as important to model as the accumulation phase. Withdrawing too aggressively early in retirement — especially during a market downturn — can permanently impair your portfolio through sequence-of-returns risk. This calculator shows how different withdrawal rates affect portfolio longevity and how the Australian Age Pension from 67 can dramatically extend it.
The withdrawal rate comparison table uses your actual portfolio and return rate. Green rows indicate rates where the portfolio lasts 100+ years (effectively permanent). Red rows indicate depletion ages where you may outlive your money. The Age Pension toggle shows how government support transforms the picture.
Frequently asked questions
What is a sustainable withdrawal rate?
A sustainable withdrawal rate is the percentage of your portfolio you can withdraw each year without depleting the principal over your retirement horizon. The 4% rule suggests that a 4% annual withdrawal from a diversified portfolio is sustainable over 30 years in most historical scenarios. For longer retirements (40–50+ years), 3–3.5% is more conservative. The 'perpetual' rate — where the portfolio never depletes — is approximately equal to the real return rate of the portfolio.
What is the perpetuity withdrawal rate?
The perpetuity (or 'forever') withdrawal rate is the amount you can withdraw annually without ever touching principal — your portfolio's annual return covers all withdrawals. This calculator shows it as 'sustainable annual income' = portfolio × return rate. For example, a $1.5M portfolio earning 7% generates $105,000/yr sustainably. This is more conservative than the 4% rule for 30-year retirements but appropriate for very long FIRE timelines.
How does the Age Pension extend portfolio life in Australia?
The Age Pension (up to $29,754/yr single, $44,856/yr couple, FY 2025-26) reduces how much you need to draw from your portfolio from age 67. This has a compounding effect: for every dollar the pension covers, your portfolio draws $1 less per year, allowing more to remain invested. At 7% return, $29,754 less drawdown per year means the portfolio is ~$425,000 richer after 30 years. This is why the Age Pension is such a significant feature in Australian FIRE planning.
What return rate should I use in retirement?
Retirees typically use a more conservative return assumption than accumulators, because a bad sequence of returns at the start of retirement can permanently impair the portfolio (sequence-of-returns risk). A 5–6% return rate during drawdown is common for Australian balanced portfolios. You might also consider holding 1–2 years of cash as a buffer, allowing the portfolio to stay invested through short downturns without forced selling.
Should I draw from super or non-super first in retirement?
In Australian retirement, super in pension phase earns tax-free returns and withdrawals are generally tax-free from age 60. This makes it attractive to preserve super as long as possible. Drawing from non-super investments first means the super continues to compound tax-effectively. However, Centrelink assets and income tests for the Age Pension may affect this strategy — super is counted in the assets test from age 67. Consult a financial adviser for personalised sequencing advice.