Retirement should be a time to relax, not worry about money. Yet one of the biggest fears retirees face is outliving their savings. Market volatility, rising living costs, and longer lifespans make this a real concern.
The good news? There’s a way to create a guaranteed income stream for life – and in some cases, it can even improve your Centrelink Age Pension eligibility.
Why a Lifetime Income Stream Matters
Most Australians rely on account-based pensions. These are flexible but depend on investment performance. If markets fall or withdrawals are too high, your balance can shrink fast.
A lifetime income product solves this by providing a guaranteed income for life. Think of it as a paycheque that never stops – no matter how long you live.
How It Works
- You invest a lump sum into a lifetime income product.
- It pays you a regular income for life.
- It can be paired with your super and other investments for flexibility.
Case Study: Margaret & John
Margaret and John wanted certainty. They were worried about market downturns and how that might affect their lifestyle. We structured their retirement plan with two layers:
- Lifetime income product for essential expenses.
- Account-based pension for lifestyle extras.
Now they have peace of mind knowing their basics are covered forever.
Centrelink Advantage
Here’s something many people don’t realise:
Under current rules, only a portion of the purchase price of a lifetime income product counts towards your assets for the Age Pension means test.
For example:
- At commencement, only 60% of the amount invested is assessed as an asset.
- After age 84 (or a minimum of 5 years), that drops to 30%.
This can increase your Age Pension entitlement compared to holding the same amount in an account-based pension, which is fully assessed.
Benefits of Lifetime Income Products
- Security: Income for life.
- Flexibility: Combine with other pensions.
- Centrelink boost: Lower asset test impact.
- Confidence: Spend without fear of running out.
Is It Right for You?
Lifetime income products aren’t for everyone. They work best as part of a layered retirement strategy – covering essentials with guaranteed income and using other investments for flexibility.
Next Step
If you’re approaching retirement, ask yourself:
Do I have an income floor that lasts as long as I do? And could I improve my Age Pension by restructuring my assets?
