No one-size-fits-all when it comes to retirement income

Fifty years ago, retirement was a lot simpler. It was, on average, a lot shorter too. And while there were outliers, the experience of retirement was broadly similar for many people.

But today it’s different.

As time spent in retirement has increased (potentially 30 years, with a life expectancy of 88 for males and 90 for females aged 65) so has the amount of money people have to spend during it (the average super fund member balance is now $330,860). And with more money and more time, the variety of lifestyles that can be enjoyed has blossomed too. It’s clear – retirees are not all the same, and this diversity in aspirations for retirement needs to be met by an increase in diversity of retirement income solutions to help fund them.

Recognising the increasing richness in the tapestry of retirement aspirations, the government introduced the Retirement Income Covenant. This came into force on 1 July 2022 and requires super trustees to develop a retirement income strategy for their members – with the aim of improving the financial outcomes for Australian retirees.

The covenant will, over time, create a deeper market in retirement income solutions, which will give retirees more choice and flexibility in how they manage their retirement savings.

And so the onus is now on super funds and retirement income providers such as Challenger to provide more diverse income solutions.

Introducing our market-linked lifetime annuity

There’s no one-size-fits-all approach to lifetime income. While many retirees might like the safety and security of a guaranteed income stream, others may prefer to stay invested in markets to have the potential to grow their income over time – while accepting some downside risk.

Challenger’s market-linked lifetime annuities provide you (and your spouse if you choose) with monthly income for life that has the potential to increase over time; however, payments are less predictable because they move up or down based on the performance of the chosen market index.

There is a choice of five indexation payment options across both defensive and growth asset allocations, and you have the flexibility to switch the index option annually at no cost.*

Squeeze more out of your retirement income

Challenger’s market-linked lifetime annuities are not an all or nothing proposition.

They have been created to complement other retirement investments and sources of income, such as account-based pensions and the Age Pension.

Investing in a lifetime annuity may also help boost your Age Pension if you are eligible – and stretch your retirement savings, although in periods of strong market performance, Age Pension benefits may reduce to reflect higher income received.

Our lifetime annuities have no investment management fees and therefore may result in considerable savings over the duration of your retirement.

While the market-linked lifetime annuity is designed to be held for life, there is a long period based on life expectancy where you have the flexibility to access a lump sum if your circumstances change (called ‘voluntary withdrawal’)**.

In addition, the market-linked lifetime annuity has a money back guarantee on early death (called a ‘guaranteed death benefit’).

With a Challenger market-linked annuity you can relax and enjoy retirement, knowing you’ll have income for life.

We’re here to help. For more information about this option, read the PDS and Target Market Determination or talk to your financial adviser. Visit or call us on 13 35 66.

* Before each investment anniversary, you can choose to switch your indexation payment option. If you choose to switch, the change will be effective from the next anniversary day. A request to switch must be received by Challenger at least 14 days prior to the next anniversary day. If you choose to switch your option, the first payment to be indexed by the new payment option will be the 13th monthly payment after the change.

** The lump sum is impacted by movements in interest rates, the chosen index, and an allowance for the cost to us of breaking the investment, and cannot exceed the maximum voluntary withdrawal value.

Challenger is a preferred partner of YourLifeChoices.

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Disclaimer: The information in this document is current as at 1 June 2022 unless otherwise specified and is provided by Challenger Life Company Limited ABN 44 072 486 938, AFSL 234670 (Challenger, our, we, us), the issuer of Challenger Guaranteed Annuity (Liquid Lifetime) also known as Challenger Lifetime Annuity (Liquid Lifetime). The information in this document is general information only about our financial products. It is not intended to constitute financial product advice. Investors should consider the Target Market Determination (TMD) and Product Disclosure Statement (PDS) and the Statement of Advice prepared by their financial adviser before making an investment decision. This information has been prepared without taking into account any person’s objectives, financial situation or needs. Each person should, therefore, consider its appropriateness having regard to these matters and the information in the TMD and PDS for the product before deciding whether to acquire or continue to hold the product. A copy of the TMD and PDS is available at or by contacting our Investor Services Team on 13 35 66. For Liquid Lifetime (Market-linked payments) option, only the first year’s monthly income amount is guaranteed. After the first year, monthly payments will move up or down annually adjusting to the changes in your chosen market-linked indexation payment options. In periods of strong market performance, any Age Pension benefits may reduce to reflect the higher income received.

Challenger Life is not an authorised deposit-taking institution for the purpose of the Banking Act 1959 (Cth), and its obligations do not represent deposits or liabilities of an authorised deposit-taking institution in the Challenger Group (Challenger ADI) and no Challenger ADI provides a guarantee or otherwise provides assurance in respect of the obligations of Challenger Life. Accordingly, unless specified otherwise, the performance, the repayment of capital and any particular rate of return on your investments are not guaranteed by any Challenger ADI.

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Written by Challenger Group

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