Defer and grow your income


When you’re about to retire, you may have the most savings that you’ve ever had. A market downturn can therefore have a big impact the amount of money you'll have for the rest of your life.

As you no longer work when you’re retired, you don’t have the opportunity to ride out market cycles and earn your capital back.

Lifetime removes this risk by insuring your income. Regardless of what happens to interest rates or financial markets, the income you get from Lifetime is insured and guaranteed for life.


I like that my income rises with good returns but can never fall, even if markets drop...


-Pete, Otago




The benefits of deferring your income


If you invest and defer your income, your Protected Income Base will never be less than the amount you originally invested, even if there is a market downturn.

Each year, your Protected Income Base is reset to the higher of your investment account balance or its present value. This locks in annual returns and protects your future income from market volatility. While your account balance will fluctuate with investment markets, your Protected Income Base will not.

Because your Regular Income is calculated from your Regular Income Base, this means your income can rise or remain the same, but it cannot fall. 

The graph shows that by deferring your income from age 63 to 70, your Protected Income Base (the pink line) rises each year with investment returns.

All increases to your Protected Income Base are locked in and cannot fall.

Your investment account balance (the green line) will fluctuate with the markets but your Protected Income Base and Regular Income can only rise or remain the same.

Another benefit of deferring your income is that the Income Rate increases with age, so when you start receiving income you'll get more.

For example, if you’re 63 today but you decide not to start your income until you’re 70, your net income rate will increase from 4.00% per annum to 4.70% per annum. Your income will remain at this higher rate for as long as you live.


You're 62 and want to invest $100,000 but don't want income until 67


Your Regular Income at 67 could be $4,200 per annum (or $161.54 each fortnight) regardless of market volatility or how long you live. This is based on a minimum Protected Income Base of $100,000 and a quoted net Income Rate of 4.20% per annum.

However, it’s likely that your Regular Income will be higher as investment returns during your deferral period will increase your income. Each year from age 62, your Protected Income Base will be reviewed and locked in to reflect market growth. However if markets fall, your Protected Income Base will stay the same. 

The table shows how this might look in a market that drops and then recovers.

At 62, your Protected Income Base is equal to your initial investment of $100,000. 

Markets perform well from age 62 to 65 and your investment account balance increases. Each year, on the anniversary of your investment, your Protected Income Base is automatically increased to lock in these gains.

However, there is a market downturn when you are 66, and your account balance falls from $123,000 to $99,000. Although your account balance has fallen, your Protected Income Base and future income have not.

The market recovers slowly in the following year and your account balance increases to $105,000. When you start receiving your Regular Income at 67, it is calculated on your highest Protected Income Base of $123,000.

At 67, your net income rate is 4.20% per annum. On an Protected Income Base of $123,000, your net Regular Income will be $5,166 per annum, paid into your bank account at a rate of $198.69 every fortnight, for the rest of your life.




What happens if your circumstances change?


Lifetime gives you the flexibility to:


  • Change your deferral period with little notice.
  • Invest additional sums at any time to top up your future income.
  • Withdraw all or part of your account balance without penalty.
  • Have your account balance paid to your estate if you pass away.



Case Study: How Dave & Sharon secured their future income


Learn how Dave & Sharon invested to protect and grow their future income.




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