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How can an annuity help my retirement?

There’s a lot to consider when it comes to retirement. Your finances play a huge role in determining when you retire, and the lifestyle you hope to lead as you begin to enjoy your newfound free time.

As the cost of living rises, market conditions change – and impact your investments - and concerns over on-going access to the Age Pension are top of mind for many; tailored financial planning and investigating a range of suitable financial products to fund your retirement has never been more important.

An annuity is one such financial product that can be used to provide you with a regular income in retirement. By design, an annuity helps to bring you certainty and peace of mind.

It complements your other sources of income and retirement investments and provides a regular, guaranteed income for life (lifetime annuities) – or for a nominated investment term (term annuities).

What are some of the benefits of an annuity?

  • A regular, guaranteed income regardless of how share markets perform.

  • Annuities purchased with superannuation are considered tax-free income from the age of 60. And, annuities purchased outside of superannuation have tax concessions, to the point where the income could be tax-free.

  • An indexed annuity protects you from the rising cost of living, which provides financial confidence that you can afford to transition into aged care if and when you need to.

  • Only a portion of your annuity is assessed for Age Pension purposes, resulting in higher Centrelink entitlements in certain cases.

  • Payments from a lifetime annuity will last as long as you live.

  • By nominating a reversionary beneficiary, a spouse or dependent will receive some income from your annuity if you die.

And few things which may make an annuity even more appealing in current conditions include:

  • The relationship they have with interest rates, as annuity payment rates on offer at the time of application are higher as interest rates rise.

  • Their resilience to market volatility, making them a good option for those who are more risk averse as they move into retirement.

If you’d like to discuss your retirement planning, and how an annuity would fit into your future financial plans call 4926 8000 to speak to one of the experienced Financial Advisors at Hub Advisory Group.

We’re proud to provide simple, tailored advice for everyday Australians – no matter your stage of life.

Disclaimer: This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.

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