Forman Financial Services

Aged Care Strategy – Investment – Purchase long term annuity

This can benefit people who:

  • have funds available to invest after paying accommodation payment
  • require a regular cashflow to assist with meeting aged care expenses
  • do not need to make voluntary commutations from the annuity

Potential Benefits:

  • A long term annuity has favourable income and asset treatment for both social security and aged care purposes
  • The asset value of a long term annuity depletes over time by the asset test depletion amount
  • The income value of a long term annuity is the annual payment – deductible amount. This may be less than deeming
  • Some long term annuity products may include an insurance policy that pays an amount to the persons estate on death

Things to be aware of:

  • For a fixed term annuity, estate or beneficiaries may have the option to continue receiving payments until end of term or commuting. When commuting, the value may be less than the original amount invested, as based on a present value calculation.
  • If a person voluntarily commutes an annuity the withdrawal value may be significantly discounted

Aged Care & Home Care can seem complex.  We have a special offer for general advice for $225.00.
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