April 2018
Alternative retirement solutions to annuities
Overview
The so-called grey tsunami of Baby Boomers’ are entering retirement at the same time the superannuation system is becoming mature. This has led to the Federal Government, regulators and industry participants shifting their focus from the accumulation to the de-accumulation (that is, drawdown) phase.
There is wide agreement about the need for comprehensive income products for retirement (CIPRs) to help improve outcomes for retirees, but policy settings have yet to be set as Treasury is taking a slow and methodical approach to the issue. This is further complicated by the fact that there is wide variety of opinion from industry experts as to the best way to proceed.
Regardless, under current legislative settings there are three products and strategies that dominate the market. These are account-based pensions, pooled investments and the bucket strategy. Each has its merits and its limits.
Featured interviewees
Learning objectives
After reading this article, you should be able to:
- compare and contrast the three most common retirement income products and strategies
- explain what a CIPR (MyRetirement product) is and its objectives.
Knowledge areas and accreditation
Knowledge area: Retirement Income Streams (45 minutes/0.75 points).
FPA CPD points 0.75 Dimension: Capability (FPA 009965).
AFA CPD points).75 (AFA 01022009).
CPA Australia CPD points 0.75 (CPA 000527).
TPB CPE (45 minutes/0.75 points).
SMSF Association CPD points: 0.75.