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Members and industry disagree on retirement income
There is a disconnect between what consumers believe is an adequate level of accumulated funds for retirement and what professional financial advisers and actuaries believe is required, according to the Financial Services Council.
Senior policy manager for tax and economics, Spiro Premetis, said that while superannuation fund members' flow figures may be consistent with levels estimated by professionals, asset estimates did not align between the two parties.
"The asset or stock figure is inconsistent with the income figure that they're saying in terms of drawdown rates," Premetis said.
Behavioural economics influenced consumers' perceptions of their retirement needs, which could make them myopic about their calculations, he added.
Premetis made the comments at the launch of the second annual ‘SMSF Insights' survey of over 600 self-managed superannuation fund (SMSF) holders jointly published by the Financial Services Council and UBS Asset Management.
Head of UBS Asset Management in Australia and New Zealand, Bryce Doherty, said the survey showed the amount that members believed they required in retirement did not match their current drawdown levels, or the drawdown levels figures presented in the 2015 report.
"They're the two things that are not matching up. What a consumer thinks they're going to need and then what we're seeing from what people are drawing down, they're not the same," Doherty said.
The report showed the amount retirees had drawn down increased in the 2016 survey, with the percentage of retirees who had drawn down $25,000 or more in the last financial year increased from 43 per cent in 2015 to 52 per cent in 2016, while 10 per cent drew down $100,000 or more (up from four per cent in 2015).
Last year's survey showed almost half (48 per cent) drew down less than $25,000.
Around half of all respondents (49 per cent) felt $1 million or more would be required for a comfortable retirement, while the other half felt they could live comfortably on less.
"The average projected savings figure was $1.17 million, while the median was around $800,000 (noting the median figure is often a more reliable indicator because it removes the effect of extremely low and high estimates)," the report said.
Around one third (32 per cent) estimated that less than $50,000 per annum of annual income would be sufficient while 20 per cent said they would need $150,000 a year or more. The average annual salary figure was $97,000 and the median was $70,000.
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