Start your income now
When it’s time to retire, you may want to turn your nest egg into a regular income straight away.
Lifetime starts by investing your savings in a balanced fund that preserves your capital while you draw down on it. Your income is then insured for life. This means that regardless of what happens to interest rates or financial markets, you receive a regular payment into your bank account every fortnight. Your income payments continue for the rest of your life, even if your original capital runs out.
How much will your income be?
The initial amount of money you invest is called your Protected Income Base. You can invest anything from a minimum of $25,000 to a maximum of $1,000,000.
Your regular, insured income is called your Lifetime Withdrawal Benefit. This is calculated from the size of your Protected Income Base and the age at which you begin your income payments.
You can start your income any time after you turn 60. Your income is a percentage of your Protected Income Base and your rate is based on your age when you decide to take income payments.
I’m 65 years old and I want to invest $100,000. What will my income be?
At 65, your Lifetime Withdrawal Benefit rate will be 5.00% per annum after fees and taxes. Your Protected Income Base will be equal to your initial investment of $100,000. This will give you an insured income of $5,000 per annum paid into your bank account at a rate of $192 every fortnight for life.
If you pass away, all remaining capital will go to your estate.
I’m 75 and my husband is 77. We’d like make a joint investment of $150,000. What will our income be?
Because you are making a joint investment, your Lifetime Withdrawal Benefit rate will be based on your age, as you are the younger partner. At 75, your Lifetime Withdrawal Benefit rate will be 6.00% per annum after fees and taxes. Your Protected Income Base will be equal to your initial investment of $150,000. This will give you an insured income $9,000 per annum paid into your bank account at a rate of $346 every fortnight for life.
If either you or your partner pass away, the full Lifetime Withdrawal Benefit will be transferred to the surviving partner for the rest of their life. Should you both pass away, all remaining capital will go to your estate.
This case study gives you a detailed example of how Lifetime can give you an income immediately.
What happens if your circumstances change?
You don’t know what’s going to happen, so it’s important that your finances can cope with whatever life throws at you. Lifetime enables you to:
- withdraw your full account balance without penalty
- withdraw up to 20% of your investment as a lump sum without penalty. Your income will be recalculated to take account of this
- have your remaining balance go to your estate if you pass away
- invest additional sums before you commence income payments
If you would like to find out more about Lifetime we can mail you a free information pack.