0:10 [Music]
0:12 the my North lifetime super account is
0:15 an accumulation account that lets
0:17 clients plan and save for retirement
0:20 while locking in asset test
0:23 benefits in this video you will learn
0:25 how the lifetime super account differs
0:28 from a standard super account how it may
0:31 unlock more HP ention for your clients
0:33 and the role commutations can play in
0:37 getting your clients more income in
0:40 retirement the lifetime super account is
0:42 simple and operates like a standard
0:46 super account in almost all ways clients
0:48 can contribute subject to standard caps
0:51 and accumulate for future retirement
0:53 income the account accepts all
0:56 contribution types aligned with myor
1:00 super there's no minimum age full
1:02 investment Choice means advising clients
1:05 on options from North's extensive menu
1:07 including managed
1:10 portfolios there's no lockin and funds
1:13 can be transferred out without penalty
1:16 the full balance is paid at death or
1:20 exit that brings us to two small yet
1:23 important differences firstly clients
1:25 can stay until they meet a condition of
1:27 release and they can then transition
1:30 into one of our other lifetime accounts
1:32 more on those accounts is available in
1:35 this series the second Innovative
1:37 difference is how accumulated Assets in
1:39 the account are means tested by center
1:42 link when it comes to receiving age
1:46 pension benefits in short lifetime super
1:48 could substantially reduce the assets
1:51 assessed by center link as the value of
1:54 a client's assessible assets reduces the
1:56 amount of age pension they are eligible
2:00 to receive increases this could unlock
2:02 far more age pension income in
2:05 retirement to explain the Innovation
2:07 that differentiates a minor lifetime
2:10 super account we must first consider how
2:13 a standard super account works the
2:16 typical super account balance is made up
2:18 of the sum of all contributions and investment
2:19 investment
2:22 earnings let's say that for the sake of
2:25 Simplicity we only contribute super as a
2:28 lump sum on the first day of each year
2:30 in this illustrative examp example a
2:33 client who has a super balance of
2:36 $50,000 plans to contribute an extra
2:39 $10,000 at the start of each year and
2:41 expects to receive 6% per year in
2:45 investment earnings so in the first year
2:48 their balance Rises by $10,000 to
2:51 $60,000 due to their contribution and
2:53 then a further
2:56 $3,600 due to investment earnings ending
2:58 on roughly
3:02 $63,000 fast forward 20 years and their
3:09 $550,000 when it comes time for cing to
3:11 calculate the client's age pension
3:14 entitlement they would take their total
3:16 super account balance and compare it
3:19 alongside any other assets held against their
3:20 their
3:22 thresholds returning to our earlier
3:24 point the higher the value of their
3:27 assets the less age pension they will be
3:30 entitled to using a standard super
3:32 account we can see this client will
3:34 retire with roughly
3:38 $550,000 in super and all of their
3:40 assets will be assessed by center link
3:42 impacting their age
3:45 pension now let's compare how the
3:47 lifetime super account
3:50 works it all comes down to how
3:52 centerlink assesses a client's purchase
3:55 amount so first a quick explanation of
3:58 the purchase amount the purchase amount
4:01 is calculated by C link and is the
4:04 amount used to conduct asset testing in
4:07 a lifetime super account it is the sum
4:09 of all lifetime super contributions
4:12 including starting balance compounded by
4:14 the legislated upper deeming rate less
4:17 the full value of
4:20 commutations so if a client generates
4:22 investment earnings that exceed the
4:25 upper deeming rate the purchase amount
4:28 will be lower than the actual account
4:30 balance okay back to our previous
4:33 example if we take the current upper
4:35 deeming rate of
4:38 2.25% the year one purchase amount would
4:40 equal the client's $50,000 starting
4:44 balance plus their $10,000 contribution
4:46 and a further
4:49 $1,350 in deemed earnings this adds up
5:00 $61,500 lower than the account
5:03 balance at the end of the same 20year
5:06 period the purchase amount equals close to
5:11 $33,000 remember the same client's total
5:18 $550,000 in line with the current
5:21 regulations when centerlink calculates
5:23 the client's age pension entitlement at
5:26 age 67 they used the purchase amount
5:29 they would then apply an additional 40%
5:30 disc discount on the value of the
5:33 purchase amount and compare that
5:35 alongside any other assets the client
5:38 owns against the assets test
5:41 threshold in this case center link would
5:44 likely only assess just under
5:47 $200,000 roughly 36% of the client's
5:49 actual account
5:52 balance looking at the two examples next
5:54 to each other we can see that by
5:56 reducing the value of assets assessed by
6:00 center link in retirement minor lifetime
6:03 super could enable access to substantial
6:10 entitlements when it comes to improving
6:13 centerlink outcomes lifetime super is
6:17 not done yet as we've noted there are no
6:19 Capital Access restrictions on Lifetime
6:22 super outside standard preservation
6:25 rules members can accumulate in a
6:27 lifetime super account until they meet a
6:30 condition of release then then able to
6:32 split their balance between a retirement
6:35 phase lifetime account and any other
6:36 account of their
6:39 choice let's quickly pause here to
6:41 understand the full potential of this
6:44 feature by splitting a client's balance
6:46 a member is effectively withdrawing a
6:49 portion of their lifetime super account
6:51 meaning center link will view this as a
6:53 commutation and the purchase amount will
6:56 reduce by the full value of the amount
6:58 commuted if the account balance is
7:00 higher than the purchase purchase amount
7:02 splitting a lifetime super account will
7:04 result in an increased proportional
7:06 reduction of the purchase
7:09 amount let's step this through using our
7:11 example if the client splits their
7:15 lifetime super balance of around
7:17 $550,000 so that half remained in my
7:20 North Lifetime and the other half went
7:22 elsewhere our lifetime super account
7:30 $275,000 a 50% reduction the purchase
7:32 amount would also Fall by the exact same
7:35 amount though this would be equal to an 83%
7:36 83%
7:39 reduction therefore the final lifetime
7:43 super account balance would be almost
7:46 $275,000 while the final purchase amount
7:48 would be close to
7:51 $58,000 again center link would apply a
7:53 40% discount on the value of the
7:56 purchase amount it would then compare
7:58 this value alongside any other assets
7:59 the client owns
8:02 against the assets test threshold this
8:04 means center link would assess just under
8:06 under
8:09 $35,000 which is only 133% of the
8:12 client's actual account balance these
8:15 differences in asset testing could mean over
8:16 over
8:18 $188,000 in additional Aid pension in
8:22 the first year of cink payments to
8:24 summarize my North lifetime enables you
8:27 to optimize your client's retirement
8:29 income whilst they are in accumul UL
8:32 ation it helps you generate a higher
8:35 income for your client's life regardless
8:35 of their
8:38 lifespan it lets you expand your
8:40 strategies and gives you the flexibility
8:43 to manage your client's goals in
8:45 retirement it offers full control of
8:47 Investments as you have freedom to
8:50 choose from nor extensive pension and
8:53 super menu and finally as this account
8:56 converts seamlessly into a lifetime
8:58 income stream it promotes long-term
9:00 engagement with clients as you support
9:03 their ongoing retirement
9:06 needs to learn more about my North
9:08 lifetime Solutions and their benefits
9:11 for advisers and their clients please
9:13 view the full range of videos in this
9:15 series from how the asset test benefits
9:18 work to maximize age pension to the
9:21 Dynamics of creating income for life we
9:24 provide all the details you need when
9:25 engaging with [Music]
9:28 [Music] clients
