Maximising savings up to
Patricia, 60 years
Patricia is a healthy 60-year old, who is single. Although she’s reached a stage where she would like to have more leisure time, she enjoys her job and isn’t ready to give up working completely. She’s made an arrangement with her employer to work part-time and enjoy the best of both worlds for now.
She has concerns about the impact volatile sharemarkets may have on her super balance. However, she’s keen to ensure her balance will grow enough to provide a comfortable level of income in retirement.
I need to preserve my super balance and draw an income to supplement part-time earnings.
Patricia is looking for a solution that can secure a supplementary income to top-up her part-time earnings now, without risking the super balance she’ll need to generate her income when she fully retires.
Protect current and future income with sharemarket protection
Recognising that Patricia is close to retirement and will need to draw income from her super, her adviser recommends rolling over $150,000 of her super into Allianz Retire+ Future Safe. Patricia can maintain her exposure to the sharemarket as a core part of her investment strategy in the lead-up to retirement, and still have peace of mind that she can limit her market losses. She can manage her exposure to sequencing risk at a time when her retirement savings are most vulnerable.
She can access at least 5% of her account balance at commencement each year to supplement her part time salary.
Investing in Future Safe will also support Patricia’s transition to retirement strategy by allowing her to access some of her super as a regular income stream.
5 key steps
Patricia works with her adviser through 5 key steps to:
Step 1: Understand her retirement goals
Patricia’s objective is to limit the impact of sharemarket losses on her super balance to protect her current and future income.
Step 2: Decide her worst-scenario upfront and choose a protection option
Patricia chooses a Floor of -10% as she still has a few years until retirement. She then goes onto the Allianz Retire+ website to see what the relevant Cap (the maximum amount she can gain if the sharemarket rises) is for Year 1. Patricia is confident she can tolerate some market losses until she fully retires. She also understands that an annual product fee of 0.85% (inclusive of GST, if any) applies.
Step 3: Choose an investment option and amount
Patricia invests $75,000 in the domestic equities index-linked option and another $75,000 in the global equities index linked option.
Step 4: Access or reinvest her money
As Patricia is over 60 and switching to a part-time income, she’ll be making withdrawals at the required rate of 4% of her Allianz Retire+ Future Safe account balance each year, and then at 5% when she turns 65.
Step 5: Check in each year to review her strategy
Patricia checks in with her adviser each year to make sure the Floor and Cap options continue to keep her overall investment returns and retirement savings on track.
For a detailed view of Patricia's investment journey, please download the full version