The Government’s proposed retirement income framework, which is intended to provide security in retirement, is actually making Australians nervous, says ANZ Wealth.
Writing for ANZ Wealth, financial adviser Troy Smith explains that the Government has been developing a solution that is supposed to provide consumers more choice of income products in order to increase their standard of living during retirement.
However, the Government has since released a number of papers that are confusing advisers, Mr Smith claims. The uncertainty is potentially leading to substandard advice on retirement income, with some pre-retirees missing the boat altogether on intelligent plans, he said.
Among the options being considered by the Government are Deferred Lifetime Annuities (DLA), retirement income streams, the vaunted Comprehensive Income Products for Retirement (CIPRs) and a suite of other income solutions.
The Government has also proposed reassessing lifetime income streams from 1 July 2019, saying existing streams would be grandfathered.
While these plans are intended to provide a steady income stream and manage longevity risk, Mr Smith warns that uncertainty surrounding the various options have left both practitioners and clients uncertain.
“The industry is undecided what the final form of reforms will look like. Some argue that CIPRs will never come into existence, whilst others argue that CIPRs are required to protect retirees from market risk,” he said.
“Either way, significant changes are likely to be made to the retirement sector, which always makes our clients nervous.”
Read more at www.moneymanagement.com.au
Are you uncertain about your retirement income? Are you aware of the Government’s plans to introduce these retirement income products?
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