Future Safe. The defensive alternative

Defensive assets like term deposits and cash can’t always provide the returns retirees need to sustain retirement income for their ever increasing lifespan. 

Did you know that:

  • Term deposit rates have fallen 97% since the 2008-09 Global Financial Crisis (GFC) to just 25 basis points.1
  •  A pre-GFC retiree with $1.25 million in term deposits could have generated around $103,000 of annual income. Today, that same retiree can potentially generate only $3,125 of annual income.4
  • A retired couple today would need over $25 million invested in cash to fund a comfortable standard of living at the current term deposit rate.3
  • Interest rate risk has doubled2. The duration of investment grade bonds in Australia has crept from a pre-GFC average of
    3.6 years to over 6 years.

Many think the only way is up and rates will eventually rise. However, combined with the potential for exposure to ‘duration creep’, the protective qualities of defensive assets are being called into question.

Looking for a defensive alternative?

Future Safe is a viable alternative to low yielding defensive assets. It helps you rebalance risk and return, by providing downside protection though a ‘Floor’ and the potential for higher returns through market-linked returns, up to a ‘Cap’. Knowing your range of returns is quite powerful and allows for more informed decision making and planning to take place.

Future Safe performs best as a component of an enhanced defensive portfolio in conjunction with fixed income, to form part of an overall defensive retirement strategy.

Future Safe is issued from the security of a life company, and provides investors with access to:

  • Market-linked returns and/or a fixed interest rate option.
  • Control of their downside risk through a protection ‘Floor’, with the potential to earn the returns of the sharemarket, up to a ‘Cap’.
  • Tax benefits (if invested for 10 year interval).
  • A competitive 80bps fee.
  • Regular or ad hoc withdrawals.
  • The option to elect a beneficiary.

Future Safe is a protected retirement strategy and is not risk-free, nor is it a cash or term deposit. Future Safe is a completely different longer-term product, with a 7 or 10-year investment interval.

Watch the webinar

  • Defensive Alternative

    Defensive Alternative

    Defensive assets like term deposits and cash can’t provide the returns retirees need to sustain retirement income for a lifetime. 

    Duration: 50 min | CPD applicable

Future Safe Resources

  • Future Safe PDS
    Future Safe PDS

    Allianz Australia Life Insurance Limited is the issuer of each policy and has authorised the issue of this Product Disclosure Statement (PDS).

  • Caps & Rates
    Caps & Rates

    Here you will find the caps & fixed rate for Allianz Retire+ Future Safe.

  • Case Study
    Case Study

    Future Safe case study - Advice triggers and emotional assets.

Future Safe Explainer Video

For a discussion on how you might use Future Safe with your clients, contact either your Business Development Manager or phone 1300 421 060.

Business Development Team

1. Reserve Bank of Australia: Retail deposit and investment rates; Banks’ term deposits ($10000); 1 year, at May 2021, issued 2 June 2021.

2. Reserve Bank of Australia: Retail deposit and investment rates; Banks’ term deposits ($10000); 1 year, at May 2021, issued 2 June 2021 [and using July 2008 term deposit rate of 8.25%].

3. Assumes average term deposit rate of 0.25%. Uses Association of Australian Superannuation Funds (ASFA) Retirement Standard of $62,828 in annual living costs for a retired couple who want a “comfortable lifestyle”. ASFA standard at March quarter 2021. Retirement Standard - ASFA (superannuation.asn.au) https://moneysmart.gov.au/glossary/asfa-retirement-standard

4. Reserve Bank of Australia: Retail deposit and investment rates; Banks’ term deposits ($10000); 1 year, at May 2021, issued 2 June 2021 and based on Allianz Retire+ Future Safe seven-year investment interval, 0% floor, 50/50 investment into S&P/ASX 200 Total Return (3.50% Cap) and MSCI World Net in AUD (3.20% Cap) indexes at June 2021. Net of 0.80% pa fee. This example uses past-performance data, which is not a reliable indicator of future performance and is no guarantee of future returns. The returns on the Future Safe product issued by Allianz Australia Life Insurance Limited ABN 27 076 033 782, AFSL 296559 (Allianz Retire+) which are used in this example are subject to a number of variables including investor elections, market performance and other external factors, and may differ from this example. Prior to making an investment decision, investors should consider the Product Disclosure Statement (PDS) which is available on our website (www.allianzretireplus.com.au).