Start your income now
When it’s time to retire, you may want to turn your nest egg into a regular income straight away.
Your savings are invested in a balanced fund that preserves your capital while you draw down on it. At the same time, your income is 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 will continue for the rest of your life, even if you completely draw down your original investment.
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 guaranteed income is called your Lifetime Withdrawal Benefit. This is a percentage of your Protected Income Base. Your Lifetime Withdrawal Benefit rate is based on your age when you first start receiving income.
You can start your income any time after you turn 60. Lifetime pays tax on your behalf at your normal PIE tax rate and all tax and fees are deducted from your account.
This means that your fortnightly Lifetime Withdrawal Benefit is paid into your bank account net of both fees and tax.
You're 65 and want to invest $100,000. What will your 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.
You're 75 and your partner is 77. You want to invest $150,000. What will your 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 tax. 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.
What happens if your circumstances change?
No one knows what’s going to happen in the future, so it’s important that your finances have the flexibility to cope with whatever life throws at you. Lifetime allows 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 to top up your income.
How Dave & Sharon got an income for life
Find out how Dave & Sharon invested with Lifetime to get a reliable income for life.