Retirement Income

After retirement there are 3 choices:

• to take your superannuation as a cash lump sum
• use it to buy an income stream product that will give you an income – such as an annuity or account based pension
• take some of the money as a lump sum and use the rest to buy an income stream.

Retirement income streams are a popular investment choice for retirees as a way of producing regular income payments throughout retirement. Retirement income streams are simply investments that allow retirees to obtain regular income and capital payments, providing the retiree with a regular income that allows them to pay their bills and plan their spending.

Insight Investment Services Advisers can offer advice on a range of retirement income products such as Account Based Pensions, Allocated Pensions and Term Allocated Pensions.

Types of income stream products

1. Account Based Pension
An account based pension or allocated pension is designed to give retirees regular payments from their investments. Your account will increase or decrease depending on the performance of your fund. As you receive each income payment, your fund is reduced by the amount of the payment. It is designed to run down over a period approximating your life expectancy: you receive regular income as long as you have funds in the account.
 

2. Annuities
An immediate annuity is an investment product that allows you to use a lump sum to provide you with a regular, guaranteed income over a specified term ranging from 1 year to 25 years and even a lifetime. It allows you to use a lump sum amount from either personal savings or superannuation money. The income you receive will depend on how much money you initially invest and the frequency of your payments each year. The interest rates you receive are generally set at the time of investment and will not change over the period of the annuity.