A Guide to Income in Retirement_1

A guide to income in retirement

Feel confident with income that lasts for your lifetime.

Get the full Guide emailed to you

With longer lifespans and less certainty in the world’s financial markets, making sure your money goes the distance is more important than ever. While it can be tempting to ‘stick to what you know’, staying on autopilot without investigating your income options could mean missing out.

Take a look at your retirement income with fresh eyes

In this guide, we share five key steps to building a comprehensive retirement income plan to provide you with regular income for life. You’ll discover how to support your existing income with an approach that is fast becoming a smart strategy for modern retirees.

What you’ll learn:

Step 1: Changing with the times: shifting your mindset and strategy to meet the reality of living for longer.

Step 2: Your retirement ‘pay cheque’: understand your options for regular income in retirement.

Step 3: Navigating the risks: learn the pitfalls to watch out for in retirement.

Step 4: Creating a reliable safety net: secure your income with a comprehensive retirement income plan.

Step 5: Ensuring your own peace of mind: learn about the benefits of regular lifetime income.

It’s easy to get started

If, like the majority (80%) of Australian retirees, having income for life is a top priority in retirement, this is the guide for you.

Step 1: Changing with the times

Shifting your mindset and strategy to meet the reality of living longer

Years ago, a ‘set and forget’ approach to retirement might have been all you needed to enjoy a comfortable lifestyle. But times have changed and making an informed decision about your money is the best way to look forward to a less stressful future.

Studies show that as humans, we tend to have a blind spot when it comes to planning ahead. We treat our future selves like strangers, placing a higher value on immediate gratification, rather than planning for tomorrow. It’s the reason why many of us can find it difficult to save, exercise regularly or eat less sugar.

The average 65-year old underestimates their life expectancy by almost 5 years.

A reality check on retirement – there’s a good chance you’ll live longer than you think

Perhaps the biggest blind spot we have is how long we’ll spend in retirement. In the 25 years between 1992 and 2017, the most common age of death increased by ten years, from 78 to 88.

Life expectancy rates published by the Australian Bureau of Statistics take into account the chances of survival until a certain age, but they don’t account for mortality improvements that are enabling each generation to live longer than the one before. Once this trend is factored in, a more realistic life expectancy of 88 for males and 90 for females emerges. That’s potentially 30 years of retirement you’ll need to fund. And if you retire sooner than you’d planned, because of medical reasons or redundancy for example, you could be looking at an even longer retirement.

Average life expectancy
From birth
From age 65
From age 65 with mortality  improvements
Males
80 84
88
Females
84 87
90

Probability of a 65-year old male surviving to different ages

age life 
Australian Bureau of Statistics, Retirement and Retirement Intention, Australia, 2018-19 and Australian Life Tables 2015-2017 with 25-year mortality improvement factors from the Australian Government Actuary.

 

As shown in the table above, a 65-year old male has a 50% chance of reaching age 89. There is also a 25% chance of living to 94, and a 10% chance of living past 98.

If you think that life gets less expensive as you age, think again. Your social life may indeed slow down in your 80s and 90s, but research  from the Australian Superannuation Fund Association (ASFA) found that older retirees face increased costs for medical expenses, care and assistance in the home. According to the Centre of Excellence in Population Ageing Research  (CEPAR), over half of 85-year old retirees are receiving assistance, and one quarter are living in an aged care facility. On top of this, out-of-pocket expenses for major medical procedures and ongoing medical expenses can also increase with age.

‘Safety net’ income is secure income that is set aside to help you afford essential needs for your lifetime, regardless of how share markets perform.

A longer retirement means a greater focus on safety net income

With potentially up to three decades to plan for, retirement requires a greater focus on safety net income to help you cover the essential costs of living. Income from investments like shares isn’t guaranteed, and income from account-based pensions usually isn’t either. Income payments from the majority of account-based pensions will stop once your initial investment runs out. Whereas safety net income from a lifetime income stream will be paid to you however long you live, regardless of what happens in the share market. Your safety net income may also include payments from the Age Pension if you’re eligible.

Retirement income that lasts for as long as you do

From a money point of view, retiring means shifting your mindset from saving and growing your nest egg, to protecting your money and making sure you have enough income for the rest of your life. In this guide, we show you how boosting your safety net income provides you with more certainty and peace of mind in retirement.

Test your knowledge of step one

One of the best investments you can make for your retirement is taking time to understand your options. Take this mini quiz to review what you’ve learned so far.

Q1. The average 65-year old underestimates their life expectancy by:

Incorrect. According to research from National Seniors Australia, the average 65-year old underestimates their life expectancy by five years. Take a look at the research for more information.
Correct. According to research from National Seniors Australia, the average 65-year old underestimates their life expectancy by five years. Take a look at the research for more information.
Incorrect. According to research from National Seniors Australia, the average 65-year old underestimates their life expectancy by five years. Take a look at the research for more information.
Q2. Your costs for medical expenses, care and assistance are likely to decrease as you age:
Incorrect. Your social life may slow down in your 80s and 90s, but research from the Australian Superannuation Fund Association (ASFA) found that older retirees face increased costs for medical expenses, care and assistance in the home.
Correct. Your social life may slow down in your 80s and 90s, but research from the Australian Superannuation Fund Association (ASFA) found that older retirees face increased costs for medical expenses, care and assistance in the home.
Q3. With mortality improvements factored in, the average life expectancy of a 65 year-old male in Australia is:
Incorrect. Life expectancy rates published by the Australian Bureau of Statistics take into account the chances of survival until a certain age, but they don’t account for mortality improvements that are enabling each generation to live longer than the one before. Once this trend is factored in, a more realistic life expectancy of 88 for males and 90 for females emerges.
Incorrect. Life expectancy rates published by the Australian Bureau of Statistics take into account the chances of survival until a certain age, but they don’t account for mortality improvements that are enabling each generation to live longer than the one before. Once this trend is factored in, a more realistic life expectancy of 88 for males and 90 for females emerges.
Correct. Life expectancy rates published by the Australian Bureau of Statistics take into account the chances of survival until a certain age, but they don’t account for mortality improvements that are enabling each generation to live longer than the one before. Once this trend is factored in, a more realistic life expectancy of 88 for males and 90 for females emerges.

Step 2: Your retirement ‘pay cheque’

Understand your options for regular income in retirement

Nothing beats the reassurance of knowing there’s money coming in each month. Then retirement happens and, suddenly, it’s up to you to generate income to live on. The good news is, stability is something you don’t need to give up.

As humans, we’re wired to stick to what we know. It feels familiar and comfortable, but it’s not always the best option for us. Especially when we rely on assumptions that don’t match up with reality. Your super is only one part of your retirement income plan. In reality, most people will be supported by other sources of income such as the Age Pension or income from other investments like shares or property. In this step, we provide a summary of three key sources of retirement income. And we get to the bottom of some of the things people often get wrong about each one.

1.  Income from your super: Account-based pensions or allocated pensions

When you retire, one option is to roll your super over into an account-based pension that uses your super to provide you with a regular income in retirement. You get to choose how often you receive your income payments, and how much of your super you withdraw each year (provided it meets the minimum withdrawal requirements). You can also generally make lump sum withdrawals at any time.

Perhaps the biggest misconception about account-based pensions is the level of certainty they provide. As each payment will draw from your super savings, your payments will generally stop as soon as your savings have run out. Something else to bear in mind, is that part of the account-based pension balance is typically linked to the share market as you generally have the opportunity to invest in a range of market linked assets and so your investment – and how long your payments last – could depend on market performance. If markets perform poorly, depending on the proportion of your super which is linked to the market, could mean that your super is at a greater risk of running out.

The impact of the global financial crisis is still on the minds of Australian retirees

Older Australians’ concerns about market performance are not surprising in light of the retirement income losses they experienced at the height of the GFC ten years ago. Superannuation balance falls of around 20% (according to National Seniors Australia) affected the majority of retirees at the time. Now, only 1 in 14 older Australians indicated they would be able to tolerate a loss greater than 20% today, while in total, 59% indicated that they could not tolerate a loss as large as in the GFC.

2.  Income from The Age Pension

Once you reach Age Pension age you might be eligible for Age Pension payments, and a series of other benefits. Eligibility for the Age Pension depends on your circumstances and the outcome of Centrelink’s assets and income test. You can find out more about Age Pension rates here.

In Australia, we’re lucky to have the Age Pension to fall back on if our retirement savings run out. It can be common to assume that the Age Pension alone will be enough to live on. The reality is that even the full Age Pension entitlement isn’t enough to cover the cost of living for many retirees.

 

Association of Superannuation Funds of Australia (ASFA) Retirement Standard figures

  Comfortable lifestyle budget p.a.  Modest lifestyle budget p.a.  Age Pension p.a.
Couples aged around 65  $63,352 $41,170 $37,924
Single person aged around 65 $44,818 $28,514 $25,155

3.  Lifetime income streams

A lifetime income stream, such as a lifetime annuity, provides you with regular income for your lifetime, in return for a lump sum investment from your super or your savings. The key difference to an account-based pension is that your payments will be made for as long as you live. So even if you live longer than you expect, you’ll have the peace of mind that your income payments will continue, and can continue for your spouse’s life if you choose as well.

A common assumption people make is that you either have an account-based pension or an annuity. In fact, you don’t have to put all of your super or savings into an annuity. You can use part of your super or retirement savings to buy an annuity, while the rest of your money stays in your super or other investments. An annuity can provide an additional layer of protection in retirement.

Lifetime annuities come with other features too, which you can read about here.

A lifetime annuity can work alongside your account-based pension

  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 While lifetime annuities are designed to be held for life, there is usually a long period where you can access a lump sum if your circumstances change. Partial withdrawals are not generally available.
Inflation protection  No – your payments may increase in line with inflation, but generally your capital isn’t protected as you are simply just withdrawing more from your balance
Option to index payments to inflation 


Other investments to support you in retirement

There are some other investment options that can supplement your income in retirement, such as term deposits, property and shares. All these options come with their own pros and cons, and you can read more about them here.

What we get asked

Q.  How will a lifetime annuity affect my Age Pension?

A.  Purchasing a lifetime annuity could immediately increase your Age Pension payments, due to changes to Centrelink’s means testing rules. Unlike many investments which are 100% assessable for the assets test, certain lifetime annuities are treated more favourably.

Generally, 60% of the lifetime annuity purchase price will count as an asset, through to age 84, or for a minimum of five years. From then onwards, only 30% of the purchase price will count.

For the income test, only 60% of your lifetime annuity payments are assessable.

Test your knowledge of step two

One of the best investments you can make for your retirement is taking time to understand your options. Take this mini quiz to review what you’ve learned so far.

Q1.  Payments from the majority of account-based pensions will continue after the balance runs out:

Incorrect. As each payment will draw from your super savings, your payments will generally stop as soon as your savings have run out.
Correct. As each payment will draw from your super savings, your payments will generally stop as soon as your savings have run out.
Q2.  According to National Seniors Australia, by how much on average did super balances drop during the GFC?
Correct. At the height of the GFC in 2008, superannuation balance falls of around 20% (according to National Seniors Australia) affected the majority of retirees at the time.
Incorrect. At the height of the GFC in 2008, superannuation balance falls of around 20% (according to National Seniors Australia) affected the majority of retirees at the time.
Incorrect. At the height of the GFC in 2008, superannuation balance falls of around 20% (according to National Seniors Australia) affected the majority of retirees at the time.
Q3.  If you invest in an account-based pension you can’t also invest in an annuity:
Incorrect. Annuities actually complement other retirement investments and sources of income such as account-based pensions.
Correct. Annuities actually complement other retirement investments and sources of income such as account-based pensions.

Step 3: Navigating the risks

Learn which pitfalls to watch out for in retirement

While living a long and healthy life sounds appealing, it does raise a valid question – is there a chance that you could outlive your savings? Making sure your money lasts throughout your retirement means being realistic about how much you’ll need to be comfortable and keeping your eye on the ball.

We all think things will turn out better for ‘us’ than ‘them’. Such optimism can serve us well in life, but when it comes to money, balancing bias with facts is a much safer option. In this step, we cover off the big four retirement income risks.

The big four retirement income risks

1.  You don’t know how long you’ll live. Without the certainty of knowing how many years to plan for, it’s much safer to assume you’ll live well into your 90s. Doing this will give you a greater chance of ensuring you have enough income to last throughout retirement, without having to rely solely on the Age Pension that is unlikely to cover your basic living costs, let alone things like medical bills, aged care or in-home assistance. This risk can sometimes be referred to as ‘longevity risk’.

2.  Inflation may chip away at the value of your savings. Even small increases to the cost of living over time can have a significant impact on how far your money will go. An average annual inflation rate of 2.5% might not seem like a big deal, but over the course of 25 years a $3 loaf of bread could double in price. Without the right strategies in place, increases in inflation over time could mean your savings will no longer cover your living costs. This risk can sometimes be referred to as ‘inflation risk’.

3.  Later in life you’ll have less time to recover from market volatility. Exposure to investments such as shares and property comes with the risk of market volatility. When investments earn negative returns, your retirement savings are falling in value. If you need to make withdrawals from your savings or investments to pay for living expenses, it has a twofold blow for your overall financial position in retirement. It’s important to consider how best to minimise the impact on your savings from market volatility during a 20-30 year+ retirement period. This risk can sometimes be referred to as ‘market risk’.

4.  Poor returns on investments when your savings are at their peak may have a bigger impact.
In retirement, timing is everything. If the order and timing of your investment returns is unfavourable, it could result in less money for your retirement. This risk can sometimes be referred to as ‘sequencing risk’. See an example of the effects of this risk here.

Is your retirement income diversified?

Ensuring your retirement income is diversified can help manage the financial risks you face in retirement. Answering the five questions below will give some idea of whether you need to take another look at your retirement income plan:

1.  Does your retirement income come from a range of different income sources?
2.  If there’s a significant downturn in the markets, will your income still cover day-to-day expenses?
3.  Does your retirement income portfolio bring you income certainty, balanced with greater returns?
4.  Does your retirement income include both low risk and higher risk investments?
5.  Do you have income that is payable for life, no matter how long you live?

How did you go? As a general rule, the more questions you answered ‘Yes’ to, the more diversified your retirement income is likely to be.

Test your knowledge of step three

One of the best investments you can make for your retirement is taking time to understand your options. Take this mini quiz to review what you’ve learned so far.

Q1.  A full entitlement to an Age Pension will cover the costs of a ‘modest retirement lifestyle’ (as defined by the Association of Superannuation Funds of Australia Retirement Standard).

Incorrect. A full Age Pension alone would not cover the costs of a ‘modest retirement lifestyle’ (as defined by the Association of Superannuation Funds of Australia Retirement Standard).
Correct. A full Age Pension alone would not cover the costs of a ‘modest retirement lifestyle’ (as defined by the Association of Superannuation Funds of Australia Retirement Standard).
Q2.  The impact of poor market performance on your super is greatest:
Incorrect. In retirement, timing is everything. If the order and timing of your investment returns is unfavourable, it could result in less money for your retirement. This risk can sometimes be referred to as ‘sequencing risk’. See an example of the effects of this risk here.
Correct. In retirement, timing is everything. If the order and timing of your investment returns is unfavourable, it could result in less money for your retirement. This risk can sometimes be referred to as ‘sequencing risk’. See an example of the effects of this risk here.
Q3.  Your income payments from an account-based pension are impacted by share market movements or interest rate fluctuations.
Correct. Payments are impacted by share market movements or interest rate fluctuations. Learn more about account-based pensions here.
Incorrect. Payments are impacted by share market movements or interest rate fluctuations. Learn more about account-based pensions here.

Step 4: Creating a reliable safety net

A comprehensive retirement plan

Every type of income has its benefits. A smart retirement portfolio makes the most of helping to manage risk and ensuring your money is working for you at every stage of your retirement. Like any kind of investing, tapping into diverse sources of retirement income is a key to helping you balance risk and return.

Research shows that many of us overestimate our knowledge and decision-making capabilities. Known as the Dunning-Kruger effect, such biases can lead us to believe we are better at things than we might be. Let’s think about driving – most of us would rate ourselves as above average drivers. Of course, it can’t be true that everyone is above average. When it comes to something as important as our money, it’s worth taking time to explore the different options and understand them.

Two steps to a comprehensive retirement income plan

Being smart about how you combine your sources of income should provide you with enough income to live on today, and over the long term. What could a comprehensive retirement income plan look like?

1.  Safety net income to cover your basic living costs – making your safety net income a priority means ensuring you have enough income to get by day-to-day for however long you live. As we’ve already discovered, the Age Pension alone may not be enough to cover even a modest cost of living, so combining these payments with regular income from a lifetime annuity can top up your income to help cover essential costs.

2.  Money you can access at any time – once the basics are covered, you can now think about additional regular income to cover the extras, such as going out to dinner or going on holiday. An account-based pension could be a way to do this. As account-based pension payments aren’t guaranteed and may one day run out, using this income on non-essential spending is something to consider. You may also choose to invest in growth investments such as shares or property, either through your account-based pension or separately.

Test your knowledge of step four

One of the best investments you can make for your retirement is taking time to understand your options. Take this mini quiz to review what you’ve learned so far.

Q1.  When it comes to our knowledge and decision-making capabilities, research shows we tend to:

Correct. We tend to overestimate our decision-making capabilities.
Incorrect. We tend to overestimate our decision-making capabilities.
Incorrect. We tend to overestimate our decision-making capabilities.
Q2.  Safety net income, as we’ve defined it, is:
Incorrect. Safety net income is a combination of the Age Pension and other income payments that are regular and payable for life.
Incorrect. Safety net income is a combination of the Age Pension and other income payments that are regular and payable for life.
Correct. Safety net income is a combination of the Age Pension and other income payments that are regular and payable for life.
Q3.  Income from investments such as bank savings or shares are protected from inflation:
Incorrect. Income from investments such as bank savings or shares are not protected from inflation.
Correct. Income from investments such as bank savings or shares are not protected from inflation.

Step 5: Ensuring your own peace of mind

Learn more about the benefits of regular lifetime income

Experiencing the stability of income for life when you’re no longer receiving a regular pay cheque could mean the difference between being stressed and enjoying what should be the best years of your life.

With around 700 Australians retiring every day, it’s no wonder the Government is placing greater focus on ensuring retirees have access to a range of retirement income products to help fund retirement.

How could lifetime income benefit you?

•  Income that lasts for your lifetime – when you set up a lifetime income, your regular payments will continue to be paid no matter how long you live, even if that’s more than 100 years old.

Tip: With certain lifetime annuities you can nominate a beneficiary (or your estate) to receive a guaranteed death benefit if you die early.

•  Helping you to spend confidently in retirement – with the reassurance that you’ll always have income to help cover your basic living costs, you can spend more time enjoying retirement, and less time worrying about it.

•  Inflation linked income to help protect your lifestyle – Inflation measures the change in the cost of living over time. Payments from lifetime annuities can be linked to yearly inflation changes, helping you to continue to afford tomorrow what you can afford today.

The benefits of regular lifetime income

Awards Tick  Enjoy income for life
Awards Tick Cover everyday living costs
Awards Tick  Option to protect from inflation

What we get asked

Q.  What happens to my money if I die?

A.  Challenger lifetime annuities have a long death benefit period where a lump sum is payable to your estate or nominated beneficiaries. The death benefit is up to 100% of the amount invested. The maximum amount that could be received by your estate or beneficiaries depends on the time which has passed since you invested in the annuity up to the date of your death. You have the flexibility to remove this feature in return for higher regular payments.

Q.  What if I need access to my investment?

A.  While Challenger lifetime annuities are designed to be held for life, there is a long withdrawal period based on your life expectancy where you can ask to be repaid a lump sum amount if your circumstances change. See the relevant Product Disclosure Statement for more information.
 
Q.  Is the income taxed?

A.  For annuities purchased with superannuation money, income payments and lump sum withdrawals are generally tax-free if you are age 60 or over.

For annuities purchased with your retirement savings (outside super), income payments and lump sum withdrawals may have some taxable income. Challenger provides an annual PAYG statement which has all the details you need to complete your tax return.

Take the worry test

Could you benefit from a lifetime income stream? Answer these four questions to find out.

1.  Do you worry about whether you’ll outlive your retirement savings?
2.  Do you worry about covering day-to-day living costs later in retirement?
3.  Do you worry that the Age Pension may not be enough to live on in the future?
4.  Do you wish you had more peace of mind with your income?

How did you go? If you answered ‘Yes’ to any of the above questions, speak to your financial adviser or call us on 13 35 66.

Test your knowledge of step five

One of the best investments you can make for your retirement is taking time to understand your options. Take this mini quiz to review what you’ve learned so far.

Q1.  Even if you live to 100 years old or more, you will still receive payments from a lifetime annuity:

Correct. Your regular payments from a lifetime annuity are guaranteed no matter how long you live, even if that’s more than 100 years old.
Incorrect. Your regular payments from a lifetime annuity are guaranteed no matter how long you live, even if that’s more than 100 years old.
Q2.  You can use your super or other savings to buy a lifetime annuity.
Correct. You can use your super or other savings to buy a lifetime annuity.
Incorrect. You can use your super or other savings to buy a lifetime annuity.

What’s next?

Conduct your own research into annuities before making any decisions. Your financial adviser can also help, as can calling our Investor Services team on 13 35 66.

You may want to read about the products we offer before contacting your adviser or our team, which you can do in the product section of this website. All relevant Target Market Determinations (TMDs) and Product Disclosure Statements (PDSs) are also available within each product page.

Speaking to an expert

If lifetime income appeals to you, an important step is to seek financial advice. Your financial adviser can look at your personal circumstances, and help you answer some important questions:

•  Is an annuity right for me?
•  What kind of annuity should I consider?
•  When is the right time to invest?
•  How much should I put into an annuity?
•  How will an annuity interact with my Age Pension?
•  What happens if I need access to my money?
•  What happens when I die?

Tip: If you’d like assistance finding a financial adviser, simply fill out this form and let us know some of the things you’d like to speak with an adviser about.

Why Challenger?

Before investing in an annuity, it’s good to know your money is in safe hands. Challenger is Australia’s largest provider of annuities. Since 1985, it’s been our mission to provide retirees, like you, with financial security in retirement through safe and reliable income. With $21 billion in assets under management (as 30 June 2021), thousands of retirees trust us to provide them with confidence and certainty in later life.

As we’re regulated by the Australian Prudential Regulation Authority (APRA), we must hold a minimum amount of capital to help ensure that we are always in a position to deliver on our payments to you – now and in the future. You can learn more about our promise here.


If you would like to hear more from Challenger, sign up for our news and insights newsletter, Retirement Matters, designed for Australian retirees.
The information in this guide is current as at 20 September 2020 unless otherwise specified and is provided by Challenger Retirement and Investment Services Limited ABN 80 115 534 453, AFSL 295642 and Challenger Life Company Limited ABN 44 072 486 938, AFSL 234670 (together referred to as Challenger, our, we, us).  This information has been prepared without taking into account any person’s objectives, financial situation or needs. Each person should, therefore, consider its appropriateness having regard to these matters and the information in the Challenger Guaranteed Annuity (Liquid Lifetime) Target Market Determination (TMD) and Product Disclosure Statement (PDS) before deciding whether to acquire or continue to hold the product. A copy of the TMD and PDS is available at www.challenger.com.au or by contacting our Investor Services Team on 13 35 66.  

Challenger Life is not an authorised deposit-taking institution for the purpose of the Banking Act 1959 (Cth), and its obligations do not represent deposits or liabilities of an authorised deposit-taking institution in the Challenger Group (Challenger ADI) and no Challenger ADI provides a guarantee or otherwise provides assurance in respect of the obligations of Challenger Life. Accordingly, unless specified otherwise, the performance, the repayment of capital and any particular rate of return on your investments are not guaranteed by any Challenger ADI.
Any examples shown in this guide are for illustrative purposes only and are not a prediction or guarantee of any particular outcome. This guide may include statements of opinion, forward looking statements, forecasts or predictions based on current expectations about future events and results. Actual results may be materially different from those shown. This is because outcomes reflect the assumptions made and may be affected by known or unknown risks and uncertainties that are not able to be presently identified. Neither Challenger nor its related bodies corporate nor any of their directors or employees, or associates of any of these, receive any specific remuneration or other benefits for any advice provided in this guide in respect of the applicable product. Some or all of Challenger group companies and their directors or employees may benefit from fees and other benefits received by another group company. Financial advisers may receive fees if they provide advice to you or arrange for you to invest with us. 


Any illustrations involving taxation, Centrelink rules or benefits and/or Department of Veterans’ Affairs rules or benefits are based on current laws at the date of currency specified in this guide and these laws may change at a future date. Neither Challenger, nor any of its officers or employees, are a registered tax agent or a registered tax (financial) adviser under the Tax Agent Services Act 2009 (Cth) and none of them is licensed or authorised to provide tax or social security advice. Age Pension benefits described in this guide will not apply to all individuals. Age Pension outcomes depend on an individual (or couple’s) personal circumstances and may change over time. While lifetime income streams may immediately benefit some Age Pension eligible retirees who are assessed under the assets test, in later years, if assessed under the income test, any ongoing Age pension benefits may be reduced. Before acting, we strongly recommend that prospective investors obtain financial product advice, as well as taxation and applicable social security advice, from qualified professional advisers who are able to take into account the investor’s individual circumstances. In preparing this information about taxation, Centrelink rules or benefits and/or Department of Veterans’ Affairs rules or benefits, Challenger relied on publicly available information and sources believed to be reliable, however, the information has not been independently verified by Challenger. 


While due care and attention has been exercised in the preparation of this information, Challenger gives no representation or warranty (express or implied) as to its accuracy, completeness or reliability. The information presented in this guide is not intended to be a complete statement or summary of the matters to which reference is made in this guide. To the maximum extent permissible under law, neither Challenger nor its related entities, nor any of their directors, employees or agents, accept any liability for any loss or damage in connection with the use of or reliance on all or part of, or any omission inadequacy or inaccuracy in, the information in this guide.