26 April 2016
New Zealand's first variable annuity
New Zealand gets its first 'variable annuity' from the Retirement Income Group
Retirees can struggle to make their money last as long as they live.
The former head of AXA has unveiled a service for retirees to turn their nest eggs into a guaranteed lifetime income.
The Retirement Income Group, founded by former AXA chief executive Ralph Stewart, has launched New Zealand's first "variable annuity with guaranteed lifetime withdrawal benefits".
As people's life expectancies increase, there is a growing worry that people will outlive their retirement savings.
But traditional annuities have not caught on in New Zealand, partly because investors are unable to get their money back, should they need it. Overseas annuities have also often proved poor value for money.
Unlike a traditional annuity, RIG's variable annuity allows investors to get their capital out whenever they need it.
Respected financial adviser and Fairfax Media columnist Martin Hawes is on the board of the Retirement Income Group Limited.
Former Retirement Commissioner Diana Crossan is also a director.