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How a lifetime annuity can complement your retirement income

Retirement Income

How a lifetime annuity can complement your retirement income

29 Mar, 2020

Whether you’re looking forward to retiring or are feeling a bit nervous, it’s important that you have a comprehensive retirement income plan to make the most of the years to come.
No two retirement income plans are the same, but what all smart plans have in common is the ability to manage risk so that your money works for you at all stages of your retirement.

Protection from financial risk

A big part of building a robust retirement income plan is making sure you’re protected against risks in retirement that could emerge. Doing so helps you to have peace of mind in retirement, even in times of economic uncertainty.

There are many potential retirement income risks to watch out for that a comprehensive retirement income plan can help safeguard against; such as outliving your savings and rising inflation.

This is where a lifetime annuity may be able to help. Challenger lifetime annuities complement other retirement investments and sources of income, such as  a pension from your super and the Age Pension. They provide a lifetime income which can be used as the foundation of your retirement portfolio.

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. 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.

You can choose for the income from a lifetime annuity to last for your lifetime, or you and your partner’s lifetime, should you require it. This can give you and your partner regular income for the entire duration of your retirement.

A lifetime annuity may also increase your Age Pension payments due to Centrelink means testing rules that support the use of certain lifetime income streams and provide what can be attractive means testing outcomes for retirees.

Part of a comprehensive plan

While a lifetime annuity can help protect you from several retirement income risks, a comprehensive retirement income plan will have a range of diverse retirement income sources that can help you to fund your retirement lifestyle.

Discussing with a financial adviser how to combine and complement your sources of income can help give you confidence in managing your retirement expenses today, and over the long term as you plan for a long and fulfilling retirement.

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