Challenger offers fixed term annuities which make regular payments for a chosen term. Regular payments can increase each year by a fixed percentage or in line with increases to the CPI¹. Capital can be returned as part of the regular payments or as a lump sum at the end of the term.

In this month’s article we will look at fixed term annuity strategies within Self-Managed Super Funds (SMSFs), during peak spending in retirement, as an alternative to term deposits and for non-residents. We will use case studies to demonstrate practical applications and benefits of fixed term annuities. For further information on fixed term annuities, see Challenger Guaranteed Annuity (Fixed Term) Product Disclosure Statement. 

SMSF minimum payment

SMSFs have to meet minimum pension payment requirements each financial year for members with account-based pensions. Fixed term annuities can provide cash flow to help ensure minimum payment obligations are met without having to sell down other assets.

¹ CPI indexation is only available for terms of 2 years or more where all capital is returned as part of regular payments.

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