We all look forward to enjoying a long, healthy life but outliving your savings could make the reality less appealing. To help your money last for your retirement it’s important to consider the following retirement risks when setting up your retirement portfolio.
There are several income sources that could make up your ‘retirement pay cheque’.
Are you confident your retirement income is secure? Use our tool to learn about a comprehensive retirement income plan.
People often think they must choose between an account-based pension and an annuity. But you don’t have to put all your super or savings into just one or the other. You can put some money towards an annuity, while the rest stays in your super or other investments.
A lifetime annuity can provide another layer of protection in retirement and with guaranteed regular income payments for your lifetime. You can feel more confident about your retirement spending now.
Account-based pension | Lifetime annuity | |
|---|---|---|
| Regular payments | Yes. | Yes. |
| Income payments | Payments generally continue until your investment runs out. | Payments are payable for life. |
| Easy access to your capital/ability to make partial withdrawals | Usually, yes. | You can access a lump sum usually for a long period based on your life expectancy if your circumstances change. Partial withdrawals are not generally available. |
| Inflation protection | No – you can increase your payments in line with inflation, but generally your capital isn’t protected as you are simply just withdrawing more from your balance. | Yes - option to index payments to inflation. |
Does your retirement income come from a range of different income sources?
If there’s a significant downturn in the markets, will your income still cover day-to-day expenses?
Does your retirement portfolio bring you regular income certainty, balanced with potential for greater returns?
Does your retirement portfolio include both low risk and higher risk investments?
Do you have income that is payable for life, no matter how long you live?
Every type of income has its benefits. A smart retirement portfolio can help manage risk and make sure your money is working for you at every stage of your retirement. Like any kind of investing, tapping into diverse sources of retirement income can be key in helping you balance risk and return.
Our lifetime income product delivers guaranteed regular income payable for life, regardless of how long you live.
When you know you have your income needs covered, it can free you up to enjoy life more. Knowing you have a resilient retirement portfolio can help give you the peace of mind to spend with confidence and make the most of your time in retirement. After all, underspending in retirement can be a bit like under retiring.
Once you reach Age Pension age you might be eligible for the Australian Government Age Pension (Age Pension) payments, plus other benefits. Eligibility for the Age Pension depends on your circumstances and Centrelink’s assets and income tests.
You can find out more about Age Pension rates here.
In Australia, we’re lucky to have the Age Pension. But the Age Pension alone may not be enough to live off. When we look at cost-of-living estimates in the table below, it’s clear that the full Age Pension entitlement isn’t enough to cover living costs for many retirees.
Comfortable lifestyle (p.a.) | Modest lifestyle (p.a.) | Age pension (p.a.) | |
|---|---|---|---|
| Couples | $78,998 | $52,690 | $48,516.00 |
| Singles | $56,166 | $36,548 | $32,180.20 |
