Challenger Retirement Fund

The purpose of this strategy is to help you understand your choices regarding your current or future retirement, and to assist you with improving your outcomes throughout your retirement. This is not intended to be financial product advice.

The Challenger Retirement Fund (the Fund) is a superannuation fund which services a specific need for you. The investment objective of the Fund is to provide you with a guaranteed income stream or a guaranteed rate of return so that you can plan for your retirement with certainty.

As all the products in the Fund are closed to new members, you might need to use investments outside the Fund to generate additional income in retirement. The Fund products are not intended to be the sole solution for your retirement strategy. Rather, a combination of income streams may be ideal for assisting you to achieve and balance your retirement objectives.

Subscribe to Horizons newsletter

Horizons is our newsletter designed for retirees or those planning for their retirement. Subscribe now to receive our latest information to help you live and age well in retirement in Australia.

Key retirement objectives

The Fund's Retirement Income Strategy aims to assist you to balance and achieve the three key objectives in retirement:

maximise your retirement income;
manage risk; and
allow flexible access to your money.

Maximising retirement income

Income which is sustainable and stable can help you maximise your income throughout your retirement. Sustainable retirement income is income that is reliable and long-lasting. Stable retirement income is income which is constant and predictable each year. So ultimately, the aim is to have income which you can rely on and will be there for the rest of your life.

Managing risks

Consideration should be given in retirement to managing key risks to meeting your retirement income goals, including:

Longevity risk

Inflation risk

Market risk

Sequencing risk

Flexible access to your money

It is important to consider access to money you can draw on at any time for planned or unexpected expenses. This can help you avoid the need to withdraw from your investments at inopportune times.

Retirement Income Strategy

A guaranteed lifetime income stream can work alongside an account-based pension

It is unlikely that a single retirement income stream alone will enable you to maximise your retirement income, manage risks and provide flexible access to your money, but a combination of income streams can help you to achieve this.

Two types of income streams which are integral to the Fund’s Retirement Income Strategy are an account-based pension and an inflation-linked lifetime income stream (guaranteed lifetime income stream). The following table compares how each type of income stream helps to address the key retirement objectives.

	Account-based pension	Guaranteed lifetime income stream
Regular payments	Yes	Yes
Longevity protection	No	Yes
Inflation protection	No – your payments may increase in line with inflation over time, but generally your capital isn’t protected as you are simply just withdrawing more from your balance.	Yes
Protection against market risk	Usually, no	Yes
Easy access to your money/ability to make partial withdrawals	Usually, yes	While lifetime income streams are designed to be held for life, some provide a long period where you can access a lump sum if your circumstances change. Partial withdrawals are not generally available.

While the Fund does not have an account-based pension or lifetime income stream open for new investment, you can consider these investments outside of the Fund. You could also consider other types of income streams however they might not help you manage all your retirement objectives.

Income layering
How much guaranteed lifetime income should I have?
Project how long your retirement income will last

While this depends on your individual circumstances, a good starting point is to consider how much income you need in retirement.

The Association of Superannuation Funds of Australia (ASFA) publishes ‘Retirement Standard’ figures four times a year, which can help you get an idea of the income you will need to match your lifestyle income needs. The table below compares these Retirement Standards to the full Age Pension amount.

Association of Superannuation Funds of Australia (ASFA) Retirement Standard figures

	Comfortable lifestyle budget p.a.	Modest lifestyle budget p.a.	Age Pension p.a.
Couples aged around 65	$72,663	$47,387	$43,753
Single person aged around 65	$51,630	$32,915	$29,024

^{Full Age Pension rate as at 1 July 2024, ASFA budgets as at March 2024 quarter.}

This shows that the ASFA modest retirement lifestyle is slightly above the full Age Pension amount.

If you can meet your essential expenditure needs with the full Age Pension alone then a lifetime income stream might not be necessary for you. Similarly, if you have enough money to provide your desired income for life without ever needing the Age Pension, a lifetime income stream might not be necessary for you.

However, if you are like many retirees in Australia who can’t meet their essential expenditure needs with the full Age Pension alone, and your income from other sources is not enough to meet these expenses for life, then a lifetime income stream might be necessary to maintain your lifestyle over the course of your retirement.

You should consider how much income on top of the full Age Pension amount you need to meet your essential expenses in life. Investing a proportion of your retirement savings into a lifetime income stream that will provide this amount of additional income can help you fill the gap between the full Age Pension and your essential expenditure needs.

You should consider your own personal circumstances and preferences before making any decision. Professional financial advice can help you determine how much income you need on top of the full Age Pension amount and what type of lifetime income stream is most appropriate for you.

The following useful spending planners can help you to determine whether you can live on the full Age Pension, and if not, help you determine how much lifetime income you might need on top of the full Age Pension:

How your product fits into the Strategy

If you have a Guaranteed Allocated Pension product

Guaranteed Allocated Pension is a low-risk account-based pension which offers a guaranteed fixed rate investment option and a cash investment option.

If you have a Guaranteed Allocated Pension product you are protected from market and sequencing risk, as your investments are not impacted by market volatility. The returns are competitive for low-risk investments and have no fees, which helps you to maximise your retirement income. However, the Guaranteed Allocated Pension is not designed to help you to manage inflation or longevity risk.

If you are invested in the cash investment option, you have flexible access to your savings – you can easily withdraw a lump sum (in part or in full) at any time.

If you are invested in the fixed rate investment option, your fixed rate investments are designed to be held until the end of the investment term, when you can access your savings. However, you can choose to break your fixed term (break costs apply) and access your savings before the end of the term if your circumstances change.

As part of an income layering strategy, the income you receive from your Guaranteed Allocated Pension is recommended for your desirable, non-essential needs. It might not be suitable as a source of income to meet your essential needs as it might not last your whole life, and the value of your income can deteriorate over time as a result of inflation.

To ensure you have enough income to meet all of your essential expenditure requirements for your lifetime, you should consider investing a portion of your retirement savings in an inflation-linked, lifetime income stream. A lifetime income stream can help you cover longevity, inflation and market risks. Additionally, a lifetime income stream could help you boost your Age Pension today¹, which might help you with maximising your retirement income. However, as a lifetime income stream is intended to be held for life, it does not have flexible access to money.

You can’t add more money into your existing income stream. If you need flexible access to additional funds to meet your desired, non-essential expenses in the future, you should consider investing any additional superannuation amounts in an account-based pension outside the Fund.

Because all the Fund’s products are closed, including the Guaranteed Allocated Pension product, you can’t commence a new income stream or invest new money in an account-based pension with the Fund.

If you have a Guaranteed Personal Superannuation product

If you have a Term Life (under Super) product

Resources

We have a range of educational resources to assist you when you are in or approaching retirement.

Start planning for retirement

Everybody has a different starting point in retirement. Whether you’re fortunate enough to retire on your own terms, or if you have to retire earlier or later than expected, a key to retiring with confidence is knowledge.

A guide to income in retirement

This guide contains five key steps to building a comprehensive retirement income plan to provide you with a regular income for life.

Download the guide

Aged care

Whether considering options for yourself or deciding how best to help someone close to you, aged care is a complex area that requires careful thought.

Case study

Cafe owners Fiona and Frank have recently retired. To help fund their retirement, they decided to sell their cafe and contribute the net proceeds from the sale to top-up their superannuation.

Fiona and Frank are looking for a comfortable retirement and have estimated they would need an income of about $70,806 p.a. to help fund it. They’re sure they can’t get by on the Age Pension alone (they are currently receiving $34,525 p.a.) and think they’ll need at least $50,000 p.a. to meet their basic living expenses.

See here for how Frank and Fiona achieve their 'comfortable' lifestyle in retirement by using a combination of income streams.

Financial advice

Getting quality financial advice can help you retire with confidence.

Find a financial adviser

If you’d like some assistance finding a financial adviser, simply fill out our form online and let us know some of the things you’d like to speak with an adviser about.

We’ll contact you with a shortlist of financial advisers for you to choose from². A financial adviser can help you tailor a retirement income solution for your situation.

Financial adviser register

The Government also has information available on their Money Smart website, including:

a Financial Adviser Register – You can check financial adviser locations, qualifications, and previous employment;
tips for choosing an adviser;
an explanation of financial advice costs.

FAQs

What is the Retirement Income Strategy?

Is this Retirement Income Strategy relevant for me?

What is 'retirement income'?

What do you mean by ‘period of retirement’?

The period of retirement is intended to cover the period from the start of your retirement for however long you live.

The average age which we expect members to live until is based on the Australian Life Tables (ALT) produced by the Australian Government Actuary (AGA). The mortality rates used are the ALT 2015-17 tables with 25-year improvement factors, allowing for the fact that people are living longer due to improvements in medicine, science and nutrition.

It is important for you to consider that approximately half of all retirees will live past their life expectancy, meaning it may be a significantly longer time that you need income for.

Average life expectancy	From birth	From age 66	From age 66 with mortality improvements
Males	80	85	88
Females	85	87	90

What if I’m happy with my super as it is now?

Do I need to implement an income layering strategy?

How much total income do I need in retirement?

This will be different for most retirees.

The Association of Superannuation Funds of Australia (ASFA) updates the ‘Retirement Standard’ figures four times a year, which can help you get an idea of the income you will need to match your lifestyle income needs.

Association of Superannuation Funds of Australia (ASFA) Retirement Standard figures

	Comfortable lifestyle budget p.a.	Modest lifestyle budget p.a.
Couples aged around 65	$72,663	$47,387
Single person aged around 65	$51,630	$32,915

ASFA budgets for March 2024 quarter.

The following useful spending planners are based on the ASFA retirement standard figures and can help you to determine whether you can live on the full Age Pension, and if not, help you determine how much lifetime income you might need on top of the full Age Pension:

How much guaranteed lifetime income do I need in retirement?

Where can I find out more about retirement?

¹ Age Pension benefits described above will not apply to all individuals. Age Pension outcomes depend on an individual (or couple’s) personal circumstances and may change over time. While lifetime income streams may immediately benefit some Age Pension eligible retirees who are assessed under the assets test, in later years, if assessed under the income test, any ongoing Age Pension benefits may be reduced. Consult your financial adviser about potential impacts on your personal circumstances and whether a lifetime income is right for you.

²The list of financial advisers we provide are not authorised representatives or agents of any company in the Challenger Group, and Challenger does not make any representations about, nor accept responsibility for the suitability of the advice you may receive. Challenger does not make any money from referring you to a financial adviser. We only make money if you decide to purchase one of our products, but there is no obligation on you to buy a Challenger product.

Disclaimer

The information in this webpage is issued by Challenger Retirement and Investment Services Limited (ABN 80 115 534 453) (AFSL 295642) (referred to as CRISL), the trustee of the Challenger Retirement Fund (ABN 87 883 998 803). The information in this webpage is intended to be general only and has been prepared without taking into account your objectives, financial situation or needs. Because of that, you should consider its appropriateness, having regard to your objectives, financial situation and needs and consider seeking professional financial advice before acting on any such information.

Any examples shown in this webpage are for illustrative purposes only and are not a prediction or guarantee of any particular outcome. This webpage may include statements of opinion, forward looking statements, forecasts or predictions based on current expectations about future events and results. Actual results may be materially different from those shown. This is because outcomes reflect the assumptions made and may be affected by known or unknown risks and uncertainties that are not able to be presently identified.

Provision of any general advice to retail clients means that we are required to provide you with a financial services guide (FSG). You can find the latest version of our FSG here. Our FSG includes information to assist you in deciding whether to use any of the financial services offered by us, including who we are, the financial services we offer, the financial products to which those services relate, how we and others are paid in connection with those services, relevant relationships we have, your privacy and how we deal with complaints.

Table of Contents