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A guaranteed annuity is an investment that guarantees you a regular income for a particular term or for the rest of your life.

Product snapshot

Knowing exactly how much income you’ll receive, and how long it will last, can be a great comfort. And your guaranteed annuity income won’t be vulnerable to fluctuations in the financial markets.

The annuity provider takes on all the market risk and provides you with guaranteed regular payments for a particular term.

As part of your retirement portfolio, a guaranteed annuity could be a great option, providing you with a reliable, steady source of income over a period.

A guaranteed annuity might be right for you if you’re looking for a guaranteed regular income for a fixed term or for your lifetime, regardless of market changes. It also lets you select from a range of flexible income options, including:
 

  • Fixed term or lifetime options
  • Indexation at either a fixed percentage or CPI-linked income payments
  • Your income payment frequency
  • Investing with super or non-super monies
  • The choice of having some or all of your capital returned at the end of the term
  • The ability to withdraw funds, and nominate a reversionary (where available) or beneficiary.


If you want to find out more about guaranteed annuities and how they could fit into your retirement plan, please speak to a financial adviser if you have one, or call us on 13 13 36. 

  • An account-based pension, also known as an allocated pension, is purchased with money from your super that is invested by the trustee on your behalf. Withdrawals from the account are paid to you as an income.

    The balance of your account will go up or down according to the performance of the investments in the account and the amount you withdraw. Unlike an annuity, the return on your investment is generally not guaranteed.

  • An annuity guarantees you a regular income over a set period of time or for the rest of your life. You can buy one using a lump sum from your super or savings outside of super.

    Just how much income you’ll receive is determined by how much you invest, the term of the annuity, how much residual capital you want at the end of the term, (if any) and the interest rate at the time you invest along with any other product options you select.

    Product features available will vary depending on the product and issuer. If you want to find out more about guaranteed annuities and how they could fit your retirement plan, please speak to a financial adviser if you have one, or call us on 13 13 36

  • There are two types of guaranteed annuities available to you:

    • Fixed term – these pay a guaranteed income for a defined period of time
    • Lifetime – these pay a guaranteed income for the remainder of your life.

    This table provides a general comparison of fixed term and lifetime annuities.

     

    Fixed term annuity Lifetime annuity

    Term

    Minimum of one year with terms up to 50 years offered by some providers.

    Pays you an income for the rest of your life and the life of your reversionary, if nominated.

    Minimum investment

    Usually $10,000.

    Usually $10,000.

    Payment frequency

    Monthly, quarterly, half-yearly or yearly.

    Monthly, quarterly, half-yearly or yearly.

    Indexation

    CPI or a fixed amount up to 8%, depending on the provider.

    CPI or a fixed amount up to 8%, depending on the provider.

    Return of capital

    0% – 100% of your capital can be repaid at the end of your investment term.

    Capital is returned in the income payments. Some lifetime annuities allow you to make a withdrawal during a withdrawal period.

    The product features available will vary depending on the product and issuer. If you want to find out more about guaranteed annuities and how they could fit into your retirement plan, please speak to a financial adviser if you have one, or call us on 13 13 36.

    They’ll help you work out how to structure your retirement funds, including maximising any social security payments you may be entitled to, so you can enjoy the retirement you deserve.
     

Disclaimer
Information on this webpage is provided by Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) and Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL). It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the Target Market Determinations (TMD) for our financial products at www.cfs.com.au/tmd, which include a description of who a financial product might suit. You should read the Financial Services Guide (FSG) available online for information about our services. This information is based on current requirements and laws as at the date of publication.

Tax considerations are general and based on present tax laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.

AIL and CFSIL are not registered tax (financial) advisers under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise under a tax law.