When super minimum drawdowns exceed your spending

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.)

On a healthy portfolio, the minimum drawdown can exceed your retirement expenses in later years.

Reinvest in non-super: the engine parks the surplus in non-super investments, where it compounds until needed.

Spend the surplus: the engine treats it as extra lifestyle spending. Non-super is not rebuilt.

Recontribute to super: the engine routes surplus drawdown back into super as a non-concessional (after-tax) contribution. Subject to the annual NCC cap (currently $120k FY25-26), the TSB threshold (no contribution allowed once total super reaches $2M), and the age-75 ceiling for non-mandated contributions. When ineligible in a given year, the engine falls back to reinvesting in non-super.

Some users reinvest in non-super because they want to preserve a buffer for late-life expenses or estate.

Some users spend the surplus because the alternative is leaving large balances inaccessible inside super.

Some users recontribute the surplus to super because the wrapper has the most tax-efficient earnings treatment available (0% in pension phase, 15% in accumulation), versus marginal-rate tax on non-super earnings.

Reinvesting in non-super means the surplus is taxed each year (non-super earnings) but stays accessible.

Spending the surplus inflates lifestyle, which can be hard to scale back if markets later turn down.

Recontributing to super preserves the tax-wrapper advantage but locks the cash inside super again, subject to the same minimum-drawdown rule each subsequent year. The strategy is most beneficial below the $2M Transfer Balance Cap and the age-75 cutoff.

Engine simplification: the modelled earnings rate on recontributed amounts is the engine's existing pension-phase rate (0%) without splitting at the Transfer Balance Cap. For users at or near $2M total super, real-world recontribution lands in accumulation taxed at 15% on earnings, so the savings shown may overstate the actual benefit at very high super balances.

Engine simplification: Phase 1 caps recontribution at the annual NCC limit ($120k/yr), without modelling 2-year or 3-year bring-forward stacking. Strategy still meaningful: $120k/yr × 10 retirement years gives up to $1.2M of recontribution headroom on the primary balance before age 75.

Estate-planning angle (tax-free vs taxable component conversion to reduce death benefit tax for non-spouse beneficiaries) is NOT modelled. The strategy is also widely used for that purpose, but the simulator does not track tax-free vs taxable components or project death benefit tax.