Kaye Fallick, Author at Retirement Essentials

Choice super funds fail the test: Underperformance affects 7.5 million

Australian super fund returns for Calendar Year 2023 were robust, with an average 9.6% return reported for balanced funds.

But not all super funds deliver in the same way.

And somewhat ironically, the category called ‘Choice’ funds has been called out for poor performance by the regulator. These funds hold $1.1 trillion in super savings across 7.5 million member accounts.

In a news release on 21 February, the Australian Securities and Investments Commission (ASIC) highlighted a risk to retirement outcomes for Australians who may be holding their superannuation in persistently underperforming options.

The ASIC review found that often there was ‘insufficient emphasis on and a lack of transparency about Choice investment options that failed to meet performance expectations. There was (also) little evidence of trustees communicating to members about investment option performance in a targeted manner, and financial advisers were not always addressing underperformance where relevant.’

Aged care costs explainer: Who pays and when?

by Kaye Fallick | Retirement Spending

Most Australians like to think that they will be able to ‘age in place’, living life out in their own homes. But this is not always the case. There are currently about 180,000 Australians living permanently in aged care residences and these numbers are set to increase as the number of older citizens does. Which prompts the questions, will you have enough to fund your own age care needs? How much will you still have at age 80?

To answer these questions and others, we sought out the expert insights of Louise Biti who has been interpreting and advising on aged care for 25 years. She is also author of the best-selling guide to Aged Care, Don’t Panic: age the way you want where you want.

Aged Care is a hot topic at the moment because the release of a report on how it is funded is imminent. The Independent review of Aged Care funding, by a 12-person taskforce, took place between June and December last year. The Taskforce, chaired by Minister for Aged Care and Sport, Anika Wells, delivered its report to the Federal Government on 15 December.

Louise explains that the Royal Commission into Aged Care Quality and Safety (2021) touched on the need to have more money flowing into the aged care sector, but unfortunately time limitations did not allow them to explore adequately what it really costs. Nor how this could be shared across government and people accessing care services. This is why a taskforce was established. Many older Australians are keen to learn what the Taskforce found and recommends.

Hitting the super sweet spot: Don’t just ‘get by’

by Kaye Fallick | Superannuation

There has been a veritable deluge of research, insights and survey findings about retirement funding in recent times. With nearly 700 Australians retiring on a daily basis, this is unsurprising. Retirement does indeed seem to be ‘the new black’.

But the more insights and information we receive, the more we can see conflicting conclusions on what is happening in retirement and how people create retirement income streams. A recent survey conducted for Super Consumers Australia (SCA) is a case in point. We are used to hearing about the widespread ‘Fear of Running Out’ (FORO) sentiment held by Australian retirees. But the SCA survey suggests something different.

Commissioned in August 2023 by Susan Bell Research, the survey explored how those Australians aged 65 or older moved from the accumulation phase of super to the drawdown phase and what influenced their financial decisions. This is a topic we covered in end January this year, when we wrote about the minimum drawdown rates for super once retirees move to the decumulation phase.