POWERED BY MOMENTUM MEDIA
‘One size fits all’ approach doesn’t suit retirement
Big data shows that location can significantly impact the cost of living in retirement, but the majority of super fund members don’t receive personal advice, which leads to a ‘one size fits all’ super recommendation that doesn’t reflect reality, according to the Milliman Retirement Expectations and Spending Profiles (ESP) report.
The analysis showed the Melbourne area of Stonnington was home to Australia’s biggest spending retirees, with the average annual expenditure of retiree households sitting two-thirds higher than the national average of $33,943.
The Caboolture region in Queensland was home to Australia’s lowest spending retirees, with average annual expenditure at $26,286 a year, 26 per cent lower than the national average and a figure that could be entirely funded by the full Age Pension.
While Stonnington boasts the high-rollers, the super balance required to sustain average spending through retirement for a couple in the area is over $403,000, which is still lower than many industry forecasts.
The results suggest the industry recommendations don’t accurately reflect the reality as the bulk of super fund members don’t receive personal advice, which could potentially make retirees in wealthier suburbs complacent while those in poorer suburbs become disengaged.
Milliman pointed to issues with using CPI as a benchmark as, for example, falling prices of discretionary goods and services could distort the true impact of non-discretionary costs.
Recommended for you
Speaking to Super Review, the $70 billion fund has unveiled its new solution to address the ‘cognitive load’ of retirement as members enter their golden years.
New research has suggested it’s time to reconsider the home as a fourth pillar of the retirement income system, alongside the age pension, superannuation, and voluntary private savings.
New research has revealed over 60 per cent of retirees believe their super fund offers retirement income products suitable to support their retirement lifestyle.
Some retirees are “needlessly” paying two sets of fees and often more tax than they need to, according to the industry body.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.57 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
32.09 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
27.42 3 y p.a(%)
