Annuities as part of Retirement Income

This was a great ABC interview with Challenger CEO Brian Benari. We use annuities in our retirement plans for clients to produce secure income in retirement.

The tone of this interview in the early stages suggests the government may change the rules regarding the use of annuities in the future. Are you planning to receive 100% lump sum to repay your home loan at retirement ? That may not be a good plan. The Government after concentrating for the past 20 years on getting money into superannuation are now starting to ponder what should be done with that capital at retirement.

What the Government does not want (Liberal or ALP) is people taking large home loans for big houses just before retirement and then using the super balance to repay the home loan and then having no assessable assets and then get the full age pension. This was never the plan for superannuation and there is not a lot of evidence that this has happened in the past however the government certainly does not want this to happen in the future.

This is not a good strategy anyway as you would have an expensive house and no money to enjoy living in the home or travelling or doing anything else and certainly the Murray review has triggered the Government to give some consideration to what superannuation should look like in the future.

What do you think’s-ceo-on-superannuation-system/6906626