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Lifetime Retirement Income

Updated 19 February 2025
MoneyHub users have written to us to better understand Lifetime Retirement Income and the fund it operates, given its transformation from an annuity to an income fund. We answer the most common questions below:

​1. My understanding is that it just runs as a retirement income fund without an annuity or with any insurance provisions. How does it work?
  • Lifetime Retirement Income offers a decumulation product, which is the natural next stage in an investor’s life cycle after they’ve spent their working life accumulating savings for retirement.
  • Decumulation simply means the drawing down of savings over a calculated time horizon (generally the investor’s expected life span). In this way, Lifetime Retirement Income combines investment returns with a portion of the investor’s original capital to provide a stable retirement income.
  • This requires careful management and regular oversight of an investor’s expected investment horizon. Lifetime calculates a unique annuity factor for each of its investors and then revisits it annually to make sure it remains accurate.
  • The annuity factor is made up of the investor’s age, gender, tax rate and expected mortality. By applying the factor to the investor’s capital Lifetime Retirement Income can calculate how much capital and investment earnings can be drawn down each fortnight or 4-weekly to last a retiree (or couple) into their nineties.

2. What kind of fees are paid on Lifetime Income?
  • The fees on Lifetime Retirement Income are 1.35% per annum, and are made up of 1.00% for investment management and 0.35% for ongoing annual income monitoring. Lifetime Retirement Income’s fund is a Portfolio Investment Entity (PIE) investment so Lifetime pays PIE tax on the investor’s behalf at their Prescribed Investor Rate (PIR).

3. My understanding is that I need to spend my own money. How much does it cost to do so?
  • Any money invested in Lifetime Retirement Income remains the investor’s. Lifetime does not penalise investors for withdrawing their money; they can make both partial and full withdrawals at any time, with no limit on the number of partial withdrawals allowed. However, there is a minimum balance that needs to be maintained to remain invested in the Lifetime Income fund (unless agreed otherwise). Withdrawals are generally paid within 30 days of submitting a withdrawal request.
  • Similar to other income funds, Lifetime Retirement Income focuses on downside risk as opposed to growth, targeting medium to long term gross return of 5.50% per annum and risk as measured by volatility of 7.50% per annum.
  • The Lifetime Retirement Income team has created an Income Calculator to model various scenarios that can impact potential income, including investment horizon and approach, age, gender and starting capital.. This can give you a good feel for how things might work if you choose to invest with Lifetime Retirement Income.

For more information, check out some relevant links here:
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