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This award recognises the best longevity product - providing innovative retirement income stream solutions, ensuring financial security and confidence for retirees.
Longevity risk is the risk that a client could outlive their income. Understanding life expectancy is crucial in retirement planning to ensure clients' savings provide a secure, lifelong income avoiding longevity risk. Consider the following:
Understanding a client's potential lifespan is key to crafting a robust retirement plan. While average life expectancies provide a baseline, individual factors such as health, lifestyle, and family history must also be considered. Challenger's Retirement Illustrator can help estimate life expectancy more accurately. You can access the Retirement Illustrator on AdviserOnline.
Another measure of life expectancy, known as ‘cohort’ life expectancy, takes into account improvements in mortality. Using cohort life expectancy it is projected that1.
While you can’t control how long your clients will live, there are a number of strategies you can put in place to help address longevity risk.
An income layering strategy can provide your clients with a certain level of lifetime income using a number of complementary income streams.
This could involve using income from ‘secure’ sources, like a lifetime annuity and the Age Pension, to pay for your client’s essential costs, and using income from ‘market-linked sources’, like an account-based pension, to pay for their discretionary costs.
By adopting this strategy, you can ensure that your client has the cash flow to afford their lifestyle throughout their retirement and doesn’t rely solely on the age pension at any time.
Challenger's Lifetime Annuities provide guaranteed regular income for life, regardless of how long your clients live. This approach offers:
Homeowners
$350,000 each in superannuation
$20,000 in personal assets
$50,000 in cash & TDs
Calculating a “safe” level of retirement spending for a client requires understanding a whole lot of variables, making a whole lot of assumptions and answering a whole lot of other questions.
