David Kane
Allianz Retire+ is stepping up its focus on the $1.1 trillion* self-managed super fund market, seeking to increase adoption of its flagship lifetime income product among SMSF trustees and advisers.
Allianz Guaranteed Income for Life (AGILE) can be held alongside an SMSF’s existing investments, combining protected investment growth with guaranteed lifetime income while allowing trustees to retain control of the rest of their portfolios.
Independent research commissioned by Allianz Retire+ and conducted by actuarial firm Accurium found retirement bucketing strategies incorporating AGILE improved retirement income confidence and estate outcomes across every SMSF scenario tested. More than 3,000 retirement strategy scenarios were modelled across a range of targeted SMSF personas, examining how different retirement bucketing strategies affected income and estate outcomes**.
Allianz Retire+ is supporting its increased focus on the sector with the Accurium research, CPD-accredited adviser education and webinars, dedicated SMSF resources and retirement modelling tools designed to help advisers understand how lifetime income can be incorporated into SMSF retirement strategies. The expansion comes as longer life expectancies, market volatility and sequencing risk make it harder for retirees to balance reliable income with keeping assets invested for long-term growth.
AGILE can operate alongside existing SMSF assets in both accumulation and retirement phases, providing lifetime income, protected growth opportunities and continued access to capital.
David Kane, CEO of Allianz Retire+, said: “SMSF investors value control and flexibility, and traditionally those attributes haven’t always been associated with lifetime income products. AGILE has been designed differently, giving trustees the ability to incorporate guaranteed lifetime income alongside their existing investment strategy while retaining flexibility and access to capital.”
“As demand for retirement income solutions grows, advisers are rightly looking for evidence that these products can improve outcomes for clients.”
“The Accurium research provides that evidence. Across more than 3,000 scenarios, retirement strategies that incorporated AGILE consistently improved retirement confidence and estate outcomes.”
“Importantly, these benefits were seen across a broad range of SMSF investor profiles, demonstrating the potential role flexible lifetime income can play in modern retirement planning.”
How AGILE can work within an SMSF
AGILE has two phases. During the Growth Phase, SMSF trustees can choose from protected investment options that provide growth potential with full or partial protection against market downturns, up to the applicable maximum return. When ready, trustees can commence the Lifetime Income Phase and select fixed or rising income and other product options appropriate to their strategy.
Lifetime income is paid into the SMSF cash account. Trustees can use that cashflow to support account-based pension payments and minimum pension requirements, rebalance the portfolio, build a liquidity reserve or reinvest in other assets. AGILE can also help reduce the need to sell growth assets during a market downturn to fund retirement spending.
AGILE may be suitable for SMSF clients approaching or in retirement who want income they cannot outlive, are concerned about market volatility and sequencing risk, value certainty while retaining access to their investment, or want greater diversification of income within the fund.
The growing need for flexible longevity solutions
Longer retirements increase the challenge of determining how much can be spent sustainably, while market volatility can have an outsized impact when retirees are drawing regular income. These pressures are particularly relevant for SMSF trustees, who must balance annual cashflow needs with the need to keep part of the portfolio invested for long-term growth.
Flexible lifetime income products can complement other SMSF assets by providing a regular source of income that cannot be exhausted by longevity. This can help protect growth assets from being drawn down at unfavourable times, while preserving the trustee’s ability to manage the remainder of the portfolio in line with the fund’s investment strategy.