Hybrid Products: Attempting the Middle Ground
The retirement income market has evolved beyond the simple choice of account-based pension or annuity. Various providers now offer hybrid products attempting to blend features of both. These products typically allow some access to capital, some ability to adjust income within limits, or temporary pauses in payments, while still providing some longevity protection or income guarantees.
These products are more complex than either pure option. They often have higher fees reflecting the additional guarantees. Not all super funds offer them. Eligibility requirements and minimum investment amounts vary. The complexity means you need to carefully read product disclosure statements and understand exactly what guarantees you're getting and what flexibility you're sacrificing. What sounds like "the best of both worlds" often turns out to be "some of each but not really enough of either."
This is not product advice or a recommendation of any specific product. These observations are educational only. If hybrid products interest you, speak to a licensed financial adviser who can assess whether specific products suit your circumstances. The added complexity and cost need to justify the benefits for your particular situation.
Age Pension Planning: Some complying income stream products receive favourable Age Pension asset test treatment. The applicable treatment depends on the type of product and when it was purchased; rules have changed since 2019. Check current Centrelink provisions or seek advice from a licensed adviser to see how a specific product is assessed.
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