Investment
Insurance
Superannuation
The ING MoneyForLife investment funds are designed to take the guesswork out of retirement income planning by guaranteeing an income for life, no matter how long you live or how the market performs. The funds offer certainty and control, giving you confidence throughout your retirement.
Whether you need income today or income in the future, the ING MoneyForLife investment funds can provide you with:
During superannuation our focus is on building a nest egg for retirement. Now there is an exciting superannution opportunity, offering you new levels of certainty, control and confidence in retirement. ING MoneyForLife is currently available on the following ING products:
Deciding when to retire should be determined by your own personal goals, not the current market cycle. Whether you retire at the start of a strong market phase or at the beginning of a downturn, can have a significant impact on your account balance, and therefore your retirement income.
The ING MoneyForLife investment funds offer you certainty in how much income you will receive each year, no matter how markets are performing when you retire.
This chart should not be regarded as a forecast of you investment or indicative of future performance or income payments. Assumptions have been made and different assumptions would produce different outcomes. For example, if the investment returns are higher than those used in this chart, it will take longer for the account balance to run out. Conversely, if the investment returns are lower, the account balance will run out earlier. The assumptions are set out in full on the bottom of this webpage.
The chart is intended to show how ING MoneyForLife operates through the super and pension phases. It illustrates the relationship between the value of an investor’s investment funds and the level of guaranteed income that may be payable if the investor is alive when the account balance runs out. If the account balance has not run out at the investor’s date of death, then no guaranteed income is payable. The chart assumes no Excess Withdrawals are made. If an investor were to make an Excess Withdrawal, the Protected Income Base will decrease proportionately. There is no entitlement to any guaranteed income payment if the investor makes a complete withdrawal or a full switch out of INGMoneyForLife investment funds.
When you invest in the ING MoneyForLife investment funds a Protected Income Base will be established. Your Protected Income Base is used to determine your income payment. While your account balance may fluctuate day to day, your Protected Income Base may rise but will not fall with the markets.
Your Protected Income Base is re-calculated every two years and when you begin drawing income from your ING MoneyForLife investment funds. This ensures that you capture investment growth and are protected from market downturns.
You will receive an annual income payment which is calculated by multiplying an income rate by your Protected Income Base. If you are between preservation age and 64 the income rate is 4%, if you are 65 years or older the rate is 5%. This rate is set on your first income payment from your ING MoneyForLife investment funds and will be retained for the duration of your account.
You always have access to the balance of your ING MoneyForLife investment funds (subject to superannuation rules) and control over which investment funds you invest into. If you decide you no longer need the protection, you can access your account value should you want to take all or part of your money.
Even when the balance of your ING MoneyForLife investment funds runs out, you will continue to receive guaranteed income payments for life.
Assumptions for the chart
The initial investment is $200,000, with a 0% entry fee. The investor is 62 years of age at this time. There is no reversionary pensioner and income payments commence at age 66 and are equal to the Maximum Annual Income per annum (5% of the Protected Income Base) with no Excess Withdrawals or additional contributions. The data is not adjusted for inflation. The investor lives to at least 99 years of age. The funds have been invested in an initial asset mix of 50% defensive assets and 50% growth assets, and investment returns are assumed to be represented by a combination of the following indices and assets: Australian share -All Ordinaries Accumulation index 25%, International share -S&P500 Accumulation index (hedged) 25%, Cash and bonds - Yield from 10 Year Australian Government Bonds from 1970, prior to this Federal government bonds or NSW Government bonds of various maturities 50%. (Percentages shown are as at commencement). The assumed investment returns are adjusted to allow for applicable ongoing fees. The returns used are based on the actual returns derived by the selected indices and assets from 1923 to 1961. This time period has been chosen because it provides over 40 years of data and it depicts both a period of positive and weak market returns.
Information about the guarantee
A level of income for life will be provided once the client and their nominated reversionary pensioner, if any, have reached both their preservation ages and have not made any Excess withdrawals, and is calculated with respect to the Protected Income Base and their age when they start their pension. Excess withdrawals are certain withdrawals from their ING MoneyForLife investment funds which reduce the Protected Income Base and the level of income for life.
The guaranteed income payments which can only be sourced from the ING MoneyForLife investment funds are guaranteed by ING Life Limited to ING Custodians Pty Limited (ABN 12 008 508 496, AFSL 238346, RSE L0000673) ING Custodians under the terms and conditions of a life insurance policy. Therefore, the guaranteed income payments are contingent on the terms and conditions of the life insurance policy and the financial strength and claims-paying ability of ING Life, who is solely responsible for all obligations under the policy. ING Life is a life insurance company that is registered with and supervised by the Australian Prudential Regulation Authority.
Australians are living longer and retiring earlier and many people are now spending more than a quarter of their lives in retirement. The length of your retirement as well as market performance can have an enormous impact on retirement income.
This depends. How will the market perform over the course of your retirement? How long will you live? Many retirement income plans are built upon projections that use hypothetical returns. Actual results could vary greatly.
To illustrate, we’ve gone back over the past century to see how retirement income plans would have fared using real market returns and average inflation. For example, had you retired in 1982 your retirement savings would have performed very well. Had you retired in 1929, however, you would have run out of income in only 18 years.
Given increasing life expectancies and the likelihood of spending 30 or more years in retirement, it may be prudent to allocate a portion of your retirement dollars to a guaranteed income strategy.
Data: $500,000 invested in a diversified, multi-sector balanced portfolio comprising 25% Australian shares, 25% International shares, 30% International bonds and 20% Australian bonds rebalanced annually. Historic retirements commence in 1875 and every 2nd and 5th year thereafter until last commencing in 1985. Each portfolio funds an initial 5% drawdown in year one, thereafter an amount adjusted by the historical average of 3% inflation. Inc 1.8% fees. Source: WealthBenchmarkTM
No matter which path your retirement follows, the ING MoneyForLife investment funds, address the problem of running out of income in retirement by guaranteeing a level of income each year for the rest of your life.
Poor market performance can be harmful to investors at anytime, but in particular for those who are near retiring or have recently retired. This group of investors may find it difficult to recover the losses they have suffered as they have less time to benefit from market rebounds. Let’s look at 2007 and 2008.
Chris and Cathy retired in 2007 at 60 years of age. They currently live a very healthy and active lifestyle and both believe they will live a long life.
In 2007, together they had $500,000 in super. However over the following two years, the global financial crisis wiped 25% from their balance and in 2009 they only had $375,000 in their allocated pension.
Chris and Cathy are apprehensive and nervous about the ability to provide themselves enough income to cover their expenses in retirement. The options currently available to them are:
According to the Association of SuperannuationFunds of Australia (ASFA) Retirement Standard^ for a couple to live a ‘comfortable lifestyle’, they need approximately $50,560 p.a. To live a ‘modest lifestyle’ couples need to spend $27,454 p.a.
^Report: The Age Pension, Superannuation and Australian Retirement Incomes, Dec 08. ASFA Research and Resource Centre
The ING MoneyForLife investment funds provide you with a choice of three diversified strategies. All three funds will provide you with a guaranteed income for life.
The difference in the three investment options is that they have a different exposure to growth and defensive assets, so you can choose the fund or funds which meet the needs of your individual risk and return profile. The choice of fund will affect the value of your ING MoneyForLife balance.
The ING MoneyForLife investment funds are index linked funds and are managed closely to deliver the movements of a range of underlying indices.
ING MoneyForLife investment funds are suitable for anyone who has retirement in sight or is currently in their retirement years and wants to ensure that they (and if applicable their spouse) will receive income for the rest of their lives.
The minimum investment is $50,000 and the maximum cumulative investment is $1,000,000. You can add to your ING MoneyForLife investment funds at any time subject to a minimum additional deposit of $20,000. Each dollar added or switched to your ING MoneyForLife investment funds increases your Protected Income Base by the same amount. The increase is effective immediately on completion of the transaction.
A level of income for life will be provided to you once you and your nominated reversionary pensioner, if any, have reached your respective preservation ages, and is calculated with respect to your Protected Income Base and your age when you commence drawing an income from your ING MoneyForLife investment funds. Excess Withdrawals are certain withdrawals from your ING MoneyForLife investment funds which reduce your Protected Income Base and your level of income for life.
The guaranteed income payments which can only be sourced from your ING MoneyForLife investment funds are guaranteed by ING Life Limited to ING Custodians Pty Limited (INGC) under the terms and conditions of a life insurance policy. Therefore, your guaranteed income payments are contingent on the terms and conditions of the life insurance policy and the financial strength and claims-paying ability of ING Life, who is solely responsible for all obligations under the policy. ING Life is a life insurance company that is registered with, and supervised by, the Australian Prudential Regulation Authority.
With your ING MoneyForLife investment funds, you always have access to your account balance. If you make a lump sum withdrawal from your ING MoneyForLife investment funds, your Protected Income Base will decrease proportionately. Any payment that reduces your Protected Income Base is known as an Excess Withdrawal. All Excess Withdrawals will reduce your Protected Income Base proportionately. For example, if you withdraw 50% from your ING MoneyForLife account balance, your Protected Income Base will also decrease by 50%.
Your Protected Income Base is limited to growing by no more than three times your total net investments into the ING MoneyForLife investment funds (i.e. your total initial and additional investments into ING MoneyForLife investment funds, minus any Excess Withdrawals, multiplied by three).
When you commence a pension, you must draw a minimum annual amount from your account. The Government minimum is determined by your age and the value of your pension account on the first day of each financial year. The higher your age, the higher the percentage of your account balance that must be drawn (e.g. for those aged under 65 the minimum is 4% of the account balance compared to 14% for those aged 95 or more). In instances where the total amount paid to you for the year is less than the Government minimum, you will receive an extra payment for the difference as at June 30. This payment will not reduce your Protected Income Base if it was made by ING as a result of there being a shortfall.
If you were accumulating super, the balance of your ING MoneyForLife investment funds will usually be paid to your beneficiaries or your estate in the event of your death. If you were in pension phase, what happens to the ING MoneyForLife balance depends on whether you have nominated a reversionary pensioner for your account. If you have not nominated a reversionary pensioner, your ING MoneyForLife account balance will usually be distributed to your dependants or estate. However, if you have nominated a reversionary pensioner, your ING MoneyForLife balance, the relevant Protected Income Base and any pension payable from your ING MoneyForLife investment will continue unchanged for the life of the remaining spouse.
The information in this website is for general and illustrative purposes only. The information is not intended to provide you with personal advice and we have not taken your personal circumstances, needs or objectives into account. You must consult a financial adviser and read the Product Disclosure Statement available on www.ing.com.au or by calling 133 665 before making an investment decision. Past performance is not a guarantee of future performance and your capital invested is not guaranteed. Whilst all care has been taken, we do not accept any responsibility or liability for any errors or your reliance on this information.
