Serious failures in super fund retirement calculators
Many super fund retirement calculators are failing to help people plan for retirement
Super Consumers Australia is calling for the Government to provide access to independent, quality information to help people adequately plan for retirement, after new research released today found serious failures in super fund retirement calculators.
We found calculators can produce inappropriate guidance. 77% of calculators may recommend a default income that is too high and runs out well before the expected length of retirement or too low and lasts too long, leaving a substantial balance remaining at age 100.
“Planning for retirement is too important to just leave to super funds with a track record of poor quality guidance.” says Xavier O’Halloran, CEO of Super Consumers Australia.
Most calculators did not account for the higher spending needs of retirees who rent or who still have a mortgage on their home. No calculators included additional Government income available for renters and 73% failed to ask about whether someone has a mortgage.
“Our findings cast doubt on whether super funds have the capability to provide quality tools and guidance to help their members plan for retirement. With more people approaching retirement either renting or with a mortgage, calculators can’t assume everyone owns their home.”
Most calculators didn’t help people accurately calculate their spending needs. 73% of calculators didn’t have a budgeting tool incorporated into the retirement calculator.
“More than 30 years after compulsory super was introduced, funds are failing to support people in answering one of the most basic questions: do I have enough to retire?” says Xavier O’Halloran, CEO of Super Consumers Australia.
Super Consumers Australia is calling for a free and independent one-stop-shop to help all Australians with super and retirement. The first step in delivering this one-stop-shop is for the government to task an independent body to review and connect up the existing suite of government-provided retirement planning assistance services and tools through a single portal.
The report is available on the Super Consumers website HERE
This research was supported by a philanthropic grant from Ecstra Foundation. Ecstra is committed to building the financial wellbeing of Australians within a fair financial system. We thank the Ecstra Foundation for funding this project.