POWERED BY MOMENTUM MEDIA
Growing number of super members with $500,000 balances
Almost half of retirees are expected to have more than $500,000 in superannuation by 2031.
According to Deloitte, there were currently a majority of retirees (65%) with less than $250,000 in super ‘at retirement’.
But this was expected to reverse with the number falling from 65% to 30% before reaching almost 50% having more than half a million dollars in super.
This scenario indicated now was a topical time for people to engage with their super.
Deloitte said: “Research has shown that superannuation fund members start to engage more with their super when they reach age 50 and/or their account balance reaches $250,000 (even more so when it reaches $500,000). So, the time has come, with demographics turning in our favour, to engage more people with their retirement.”
A good way to do this, the firm said, was through retirement calculators and income estimates for members approaching retirement. The super fund should raise awareness with members then provide information on retirement and its risks.
This included how much a member expected to retire with; what their spending needs were; how much they expected to additionally spend; what product strategy was relevant for their needs and what drawdown strategy would they use.
In some cases, the member may then seek advice to confirm their preferred retirement income strategy.
Meanwhile, retirement income calculators could allow members to compare outcomes under a variety of investment portfolios, how much Age Pension uplift to expect and how different retirement products could be blended to produce different spending patterns.
“While it is tempting for product providers to think about how best to distribute their retirement product, we think that a better approach is to solve the retirement problem from a customer’s perspective – that is, we have a financial literacy problem, not a product scarcity problem,” Deloitte said.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
SuperRatings has shared the top 10 balanced options of the last financial year.
Rest Super remains “fully committed” to equities, even as it anticipates higher market volatility than experienced in previous decades.
Australian superannuation funds have again generated strong returns for FY25, with the median growth fund returning 10.5 per cent for the year, according to Chant West.
The US remains a standout destination for innovation and commercialisation, according to MLC Asset Management chief investment officer Dan Farmer.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom 465 Calder Road Calder
99.46 3 y p.a(%)
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
78.55 3 y p.a(%)
4
BetaShares Crypto Innovators ETF
50.39 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
47.50 3 y p.a(%)
