In Retirement

Financial Springs In Retirement

In retirement, it is about maintaining your lifestyle.

During your working life, you receive regular income in the form of a salary or business income. In retirement, this regular income stops, so you need to draw on your savings to meet your lifestyle costs. You set up your savings so you still receive regular payments, just like a salary. This is called a ‘retirement income stream’.

The type of income stream you can start at retirement depends on whether your savings are inside or outside of superannuation savings or with money from outside of super.

An annuity is the exchange of a portion of your savings for a series of regular fixed payments. Annuities can be purchased with superannuation savings or money outside of super.

There are three main types of annuities:

  • Fixed term annuity pays you regular income
    for a set number of years.
  • Life expectancy annuity pays you regular income
    fixed for a term based on your life expectancy.
  • Lifetime annuity pays you regular income for the remainder
    of your life.

Will you have enough?
Each year Australians are living longer due to improvements in medicine and changes in lifestyle. There is a one-in-two chance that one member of a couple age 60 today will live to age 90. So even if you plan your retirement income strategy using today’s average life expectancy, there is a good chance you’ll live beyond this age.