There is often a lot of faith placed in the ability of technology – increasingly AI – to quickly and efficiently solve many financial planning problems. This is particularly the case with retirement income calculators, often considered low hanging fruit within the financial services sector. You can see the appeal of offering such DIY tools. With nearly three million people predicted to retire over the next decade, having pre-retirees do their own projections might relieve super funds of a whole lot of work and responsibility. To be fair, it’s also a way of putting the customer/fund member in the driving seat for their own retirement wellbeing, so it makes some sense. But what if these calculators aren’t totally reliable? That would be a whole other thing, wouldn’t it.
And that’s the conclusion reached in research undertaken by Super Consumers Australia (SCA) and published in September this year. In case you’re not aware of this organisation, it’s an independent, not-for-profit advocacy group on behalf of superannuation savers with low or middle incomes. SCA is partially funded through Federal Government grants and partners with the Choice organisation.
This year the SCA set out to test the usefulness of both retail and industry superannuation fund calculators. That’s because two-thirds of funds claim that this is how they plan to help members transition to retirement, by encouraging members to use calculators to understand how their savings will fund their later years.
Somewhat surprisingly, of the 50 largest funds reviewed, SCA found that only 25 offered a publicly-available calculator. Another eight provided a link directly to the calculator on the government’s Moneysmart website.
