The former head of AXA has unveiled a service for retirees to turn their nest-eggs into a guaranteed lifetime income.

The Retirement Income Group, founded by former AXA chief executive Ralph Stewart, has launched New Zealand’s first “variable annuity with guaranteed lifetime withdrawal benefits”.

As people’s life expectancies increase, there is a growing worry that people will outlive their retirement nest-eggs.

But traditional annuities have not caught on in New Zealand, partly because investors are unable to get their money back, should they need it. Overseas annuities have also often proved poor value for money.

Unlike a traditional annuity, RIG’s variable annuity allows investors to get their capital out whenever they need it.

This could prove an option for a portion of the roughly $36 billion in funds expected to be released from KiwiSaver schemes over the next 13 years, as people reach the age of 65.

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