The Federal Government had next year’s federal election firmly in its sights with this budget, and retirees were among the beneficiaries of its fiscal largesse.
In the 2019 federal election, Labor’s proposal to abolish cash refunds for excess franking credits went down like a lead balloon. So, will the $3 million cap proposal see Labor revisit history?
Revamped annuity offering aims to improve Australians’ retirement
Australians greatly reduce their spending in their older years and are too frugal in early retirement, thanks to fear of running out of money and a lack of awareness of financial products that can help ensure a dignified retirement. Generation Life is seeking to address that knowledge gap through a revamped and more-flexible offering of its lifetime annuity product.
The investment bond specialist restructured one if its core annuity products after consultation with financial advisers and employing research from thinktank Grattan Institute and the Retirement Income Review.
Pitched as the next generation of its lifetime annuity offering, LifeIncome, the restructuring will see Generation Life offer a host of enhancements designed to make the product more palatable to retirees looking for a stable, tax-effective retirement income option.
Advisers and consultants told Generation Life that Australians spend far less in retirement once they hit the age of 80 but are more frugal than they need to be in the early years of retirement. Those early years are typically when well-funded retirees are healthy and mobile enough to travel and spend, yet many fear they will run out of money.
“There is also a lack of awareness around the financial products that exist to give them the peace of mind this won’t happen,” Generation Life said recently in announcing the new LifeIncome features.
Local market developing
The Australian annuity market has typically been seen as problematic, with providers struggling to gain a solid foothold among consumers reluctant to commit their remaining capital into a ‘lifetime’ offering.
Armed with feedback from advisers and consultants, Generation Life prioritised flexibility in its product enhancements. Though LifeIncome Flex, clients can now increase their starting income at the beginning of retirement, expand their retirement income as the investment grows over time, and reduce their income when a partner passes away.
A new dollar-cost-averaging facility also allows investors to guard against volatility by receiving a weighted-average price for their investments. And following direct feedback from clients themselves, investors can now choose to receive their monthly payments at the same time as their Centrelink Age Pension payment or on alternate fortnights.
This first round of updates to one of Generation Life’s major products reflects a desire to fit the product to the consumer, rather than hoping the consumer adjusts to the product and its design, the company said.
“Retirement is a deeply personal and emotional time, and we understand that Australians need investment options that give them flexibility and versatility, reflecting their retirement priorities and goals,” said Patrick Clarke, Generation Life’s general manager of retirement solutions.
“As the most flexible lifetime-linked annuity in the Australian market, LifeIncome Flex gives financial advisers the ability to help Aussies increase their retirement income in the early years so they can live life to the fullest throughout their retirement.”
*This article was first published in The Inside Adviser.
