The MyNorth Lifetime Super account is an accumulation product designed to help clients plan and save for retirement by potentially reducing the assets assessed by Centrelink for Age Pension benefits, thereby unlocking greater Age Pension entitlements.
Mind Map
Click to expand
Click to explore the full interactive mind map • Zoom, pan, and navigate
[Music]
the my North lifetime super account is
an accumulation account that lets
clients plan and save for retirement
while locking in asset test
benefits in this video you will learn
how the lifetime super account differs
from a standard super account how it may
unlock more HP ention for your clients
and the role commutations can play in
getting your clients more income in
retirement the lifetime super account is
simple and operates like a standard
super account in almost all ways clients
can contribute subject to standard caps
and accumulate for future retirement
income the account accepts all
contribution types aligned with myor
super there's no minimum age full
investment Choice means advising clients
on options from North's extensive menu
including managed
portfolios there's no lockin and funds
can be transferred out without penalty
the full balance is paid at death or
exit that brings us to two small yet
important differences firstly clients
can stay until they meet a condition of
release and they can then transition
into one of our other lifetime accounts
more on those accounts is available in
this series the second Innovative
difference is how accumulated Assets in
the account are means tested by center
link when it comes to receiving age
pension benefits in short lifetime super
could substantially reduce the assets
assessed by center link as the value of
a client's assessible assets reduces the
amount of age pension they are eligible
to receive increases this could unlock
far more age pension income in
retirement to explain the Innovation
that differentiates a minor lifetime
super account we must first consider how
a standard super account works the
typical super account balance is made up
of the sum of all contributions and investment
investment
earnings let's say that for the sake of
Simplicity we only contribute super as a
lump sum on the first day of each year
in this illustrative examp example a
client who has a super balance of
$50,000 plans to contribute an extra
$10,000 at the start of each year and
expects to receive 6% per year in
investment earnings so in the first year
their balance Rises by $10,000 to
$60,000 due to their contribution and
then a further
$3,600 due to investment earnings ending
on roughly
$63,000 fast forward 20 years and their
$550,000 when it comes time for cing to
calculate the client's age pension
entitlement they would take their total
super account balance and compare it
alongside any other assets held against their
their
thresholds returning to our earlier
point the higher the value of their
assets the less age pension they will be
entitled to using a standard super
account we can see this client will
retire with roughly
$550,000 in super and all of their
assets will be assessed by center link
impacting their age
pension now let's compare how the
lifetime super account
works it all comes down to how
centerlink assesses a client's purchase
amount so first a quick explanation of
the purchase amount the purchase amount
is calculated by C link and is the
amount used to conduct asset testing in
a lifetime super account it is the sum
of all lifetime super contributions
including starting balance compounded by
the legislated upper deeming rate less
the full value of
commutations so if a client generates
investment earnings that exceed the
upper deeming rate the purchase amount
will be lower than the actual account
balance okay back to our previous
example if we take the current upper
deeming rate of
2.25% the year one purchase amount would
equal the client's $50,000 starting
balance plus their $10,000 contribution
and a further
$1,350 in deemed earnings this adds up
$61,500 lower than the account
balance at the end of the same 20year
period the purchase amount equals close to
$33,000 remember the same client's total
$550,000 in line with the current
regulations when centerlink calculates
the client's age pension entitlement at
age 67 they used the purchase amount
they would then apply an additional 40%
disc discount on the value of the
purchase amount and compare that
alongside any other assets the client
owns against the assets test
threshold in this case center link would
likely only assess just under
$200,000 roughly 36% of the client's
actual account
balance looking at the two examples next
to each other we can see that by
reducing the value of assets assessed by
center link in retirement minor lifetime
super could enable access to substantial
entitlements when it comes to improving
centerlink outcomes lifetime super is
not done yet as we've noted there are no
Capital Access restrictions on Lifetime
super outside standard preservation
rules members can accumulate in a
lifetime super account until they meet a
condition of release then then able to
split their balance between a retirement
phase lifetime account and any other
account of their
choice let's quickly pause here to
understand the full potential of this
feature by splitting a client's balance
a member is effectively withdrawing a
portion of their lifetime super account
meaning center link will view this as a
commutation and the purchase amount will
reduce by the full value of the amount
commuted if the account balance is
higher than the purchase purchase amount
splitting a lifetime super account will
result in an increased proportional
reduction of the purchase
amount let's step this through using our
example if the client splits their
lifetime super balance of around
$550,000 so that half remained in my
North Lifetime and the other half went
elsewhere our lifetime super account
$275,000 a 50% reduction the purchase
amount would also Fall by the exact same
amount though this would be equal to an 83%
83%
reduction therefore the final lifetime
super account balance would be almost
$275,000 while the final purchase amount
would be close to
$58,000 again center link would apply a
40% discount on the value of the
purchase amount it would then compare
this value alongside any other assets
the client owns
against the assets test threshold this
means center link would assess just under
under
$35,000 which is only 133% of the
client's actual account balance these
differences in asset testing could mean over
over
$188,000 in additional Aid pension in
the first year of cink payments to
summarize my North lifetime enables you
to optimize your client's retirement
income whilst they are in accumul UL
ation it helps you generate a higher
income for your client's life regardless
of their
lifespan it lets you expand your
strategies and gives you the flexibility
to manage your client's goals in
retirement it offers full control of
Investments as you have freedom to
choose from nor extensive pension and
super menu and finally as this account
converts seamlessly into a lifetime
income stream it promotes long-term
engagement with clients as you support
their ongoing retirement
needs to learn more about my North
lifetime Solutions and their benefits
for advisers and their clients please
view the full range of videos in this
series from how the asset test benefits
work to maximize age pension to the
Dynamics of creating income for life we
provide all the details you need when
engaging with [Music]
[Music] clients
Click on any text or timestamp to jump to that moment in the video
Share:
Most transcripts ready in under 5 seconds
One-Click Copy125+ LanguagesSearch ContentJump to Timestamps
Paste YouTube URL
Enter any YouTube video link to get the full transcript
Transcript Extraction Form
Most transcripts ready in under 5 seconds
Get Our Chrome Extension
Get transcripts instantly without leaving YouTube. Install our Chrome extension for one-click access to any video's transcript directly on the watch page.
