Super that lasts as long as you

31 Aug 2017 By Media Super Team

With retirees feeling the pinch with low interest rates and our ever-extending life expectancy, it’s understandable that you might be apprehensive you’ll outlive your retirement savings.

For example, the life expectancy of a 65-year-old female today is 87. By 2050, that’s expected to increase to 91.1

In terms of outliving your super, here are the cold, hard stats:2

  • 1 in 2 Australians underestimate their life expectancy
  • 1 in 2 Australians will outlive their savings by 5 years
  • 1 in 4 Australians will outlive their savings by 10 years

The risk of your retirement savings running out is called ‘longevity risk’. And in reality, you can’t just rely on the Age Pension to see you through.

Most people assume that as you reach the late stages of retirement, the Age Pension will be enough for you to live off because you will tend to spend less on holidays, going out and car expenses.

However, people tend to forget that the cost of basic needs actually goes up – you start spending more on pharmaceuticals and medical requirements, in-home or residential care, and modifications to the home.

The good news is, your super can last a lifetime. Enter LifetimePlus.

LifetimePlus can give you the confidence and financial peace of mind to enjoy your retirement, without fear of your savings running out. LifetimePlus is simply an investment option that can be accessed from your Media Super Pension account or transition to retirement (TTR) account. By investing some of your Media Super Pension or TTR account in LifetimePlus, you can expect to receive an income for as long as you live.

Retirees typically invest between 10 per cent and 30 per cent of their super into LifetimePlus, which complements their other assets by providing income that never runs out, no matter how long you live. It’s also designed to give you the greatest returns when you need them the most – when your other assets may be running out.

Income that continues for as long as you live

The below illustrations3 show how a retiree can use LifetimePlus to supplement their Media Super pension and Age Pension income to make their super last a lifetime.

To find out more about LifetimePlus and how it works, speak to your financial adviser.

Media Super Financial Planners* can help you understand your current position, determine what your goals are and look specifically at your superannuation and retirement planning needs. Call the Helpline on 1800 640 886 to make an appointment with a Media Super Financial Planner* today.

1 Australian Government, Treasury projections, 2015 Intergenerational Report.

2 Expectations vs Reality of Retirement, Mercer, July 2014.

3 The illustration shown is based on an account-based pension of $400,000 with or without a 25% allocation to Mercer LifetimePlus. Investment returns of 6% p.a. have been assumed for the account based pension. Age pension rules and amounts as at 31 March 2017 have been applied. Figures are shown in today’s dollars. For more information about LifetimePlus, please refer to the LifetimePlus Product Disclosure Statement at mediasuper.com.au.

* Media Super has engaged Industry Fund Services (IFS) ABN 54 007 016 195 AFSL No 232514 to facilitate the provision of financial advice to members of Media Super. Advice is provided by one of our Financial Planners who are Representatives of IFS. Fees may apply. Further information about the cost of advice is set out in the relevant Financial Services Guide, a copy of which can be obtained by calling IFS on 1300 138 848. IFS is responsible for any personal advice given to you by its Representatives.