When super minimum drawdowns exceed your spending
What happens to the surplus when the legal super minimum drawdown is more than your annual expenses.
What it models
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Mandatory super minimum drawdown rates increase with age: 5% at 65-74, 6% at 75-79, 7% at 80-84, 9% at 85-89, 11% at 90-94, 14% at 95+. (Source: ATO standard rates from FY2023-24.)
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On a healthy portfolio, the minimum drawdown can exceed your retirement expenses in later years.
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Reinvest in non-super: the engine parks the surplus in non-super investments, where it compounds until needed.
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Spend the surplus: the engine treats it as extra lifestyle spending. Non-super is not rebuilt.
When someone might apply it
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Some users reinvest in non-super because they want to preserve a buffer for late-life expenses or estate.
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Some users spend the surplus because the alternative is leaving large balances inaccessible inside super.
Trade-offs
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Reinvesting in non-super means the surplus is taxed each year (non-super earnings) but stays accessible.
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Spending the surplus inflates lifestyle, which can be hard to scale back if markets later turn down.
ProjectFi is a planning tool, not financial advice. Projections are estimates only. Please consult a licensed financial adviser before making investment decisions.