Most of us reach retirement with a limited pot of money that has to last us for the remainder of our lives. However with interest rates remaining low for the foreseeable future, and volatile investment growth, you’re probably not going to get the kind of return on your investments that you’d like.
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The good news is that is a brilliant new investment offering for retirees which can provide you with more financial stability throughout your retirement (minimum of $100,000). Once you retire, the investment becomes a lifetime income by providing regular withdrawals.
In addition, you are not locked in to the investment so you can have access to all your capital if you change your mind or would like to get your savings out.
For someone aged 65 to 69, the “protected” income is 5% pa (tax paid) of your initial investment, which is payable for the rest of your life. The income is higher if you are older - up to a maximum of 6.5% pa (tax paid) for someone aged 80 to 85. Your money is invested in your own name via a balanced fund invested in low-cost tracker funds. Your “protected income” is paid for the rest of your life (even if you live to 120) while your unused capital is invested to help your capital grow and last longer.
There is a small insurance element within the investment that ensures that your lifetime income will not run out even if your capital does. If there are still funds in the ‘pot’ when you die, they are returned to your Estate to be distributed in accordance with your Will.
For those prior to retirement, you can still invest a lump sum. This will preserve your future income from negative market slumps while taking advantage of positive returns. When you begin receiving income payments, your income will be based on the greater of your original investment or the current fund value.
We believe this is a great innovative option which will help many people enjoy a long and comfortable retirement. With an estimated $36 billion expected to be released from KiwiSaver funds alone over the next 13 years, why not get in touch with Mike or Amanda at Foresight Financial Planning on 06 751 4510 and consider this as part of your investment planning.
To get in touch with Mike and Amanda, please call (06) 751 4510 or email [email protected] A free disclosure statement is available on request.