The MyNorth Lifetime product, available through AMP’s North Wrap platform, combines an account-based pension with the lifetime cashflow of annuities.

An annuity is a product that pays a guaranteed income for the rest of a person’s life.

Typically, retirees have had two options to choose from when it comes to their retirement:

  • An account-based pension which provides flexibility, however you can run the risk of running out of money, or
  • Taking out an annuity, which guarantees lifetime income but generally comes with smaller payments.

According to AMP, the new product will offer higher rates of lifetime income than an annuity as it is not subject to the same regulation as annuities. 

AMP CEO Alexis George said the new retirement income product will give retirees greater confidence to spend more of their superannuation nest eggs.

“It is part of the plan to give people confidence in retirement, and I think a lot of people are genuinely scared when they move into retirement about what it means to them,” Ms George said.

“This gives greater peace of mind in retirement and the confidence to spend savings and live life to the full.”

Retirees using the product will also receive an annual bonus into the account by 30 June every year.

Further, as the account is considered a lifetime income stream, it will qualify for a 40% upfront discount on the age pension assets test.

Customers will pay a $91 annual account fee and a 0.1% annual lifetime fee, as well as the standard MyNorth Super and Pension administration fees. 

Partnering with life insurer TAL, the MyNorth LifeTime solution is available for retirees, pre-retirees, and those transitioning into retirement.

Research released by AMP last month revealed a growing portion of Australian workers are worried they won’t have enough savings for retirement.

Three in five workers are concerned they won’t have enough to retire, up from two in five in 2020. 

While most workers expect to retire with around $400,000 in their nest eggs, they believe they’ll need an extra $200,000 to live out their final years comfortably. 

“The research shows that millions of Australians are fearful they will not have enough savings for their retirement,” said Ben Hillier, AMP’s General Manager Retirement Solutions.

“Heightened by increasing cost of living pressures, this fear of running out stems from a basic lack of understanding – an awareness gap – of their finances and the retirement system.

“The key takeaway for all Australians is to engage more with their retirement planning, and access resources and help – it’s never too early, or too late.”

Image by Pixabay via Pexels