Retirement
Innovation set to shake up maturing super system
Australians should expect a “fundamental shift” to the investment strategies on offer for retirees in the not-too-distant future, according to a retirement investment expert.
Innovation set to shake up maturing super system
Australians should expect a “fundamental shift” to the investment strategies on offer for retirees in the not-too-distant future, according to a retirement investment expert.
Fidelity International’s head of client solutions and retirement, Richard Dinham, has indicated there’s a growing recognition that with superannuation assets valued at $2.8 trillion, there’s a need for new solutions for people reaching the drawdown phase of their investing life cycle.
“When people are saving for retirement, the focus tends to be solely on performance,” he stated.
“While that may be appropriate during the accumulation phase, it fails to address the complex needs of those people approaching retirement or in retirement.”
Mr Dinham said as the “enviable superannuation” system matures, more people are reaching retirement with large pots of savings, but “are doing so at a point when cash rates are at all-time lows”.
The effect is that the industry will develop “more innovative solutions to meet the needs of today’s retirees”.
Mr Dinham also made the case for better education of retirees and their advisers to increase the understanding of factors that might impact on retirement outcomes.
He argued that while retirees still need to take appropriate investment risk to address inflation and longevity risk, “there also needs to be a focus on the impact of market volatility on retirement outcomes, known as sequencing risk”.
While the positive impacts of compounding and dollar-cost averaging are well understood when it comes to saving, Mr Dinham said many people “are not aware that the opposite is true during decumulation”.
“In fact, limiting losses in retirement has a more powerful effect on long-term growth than capturing the full upside of market gains,” he said.
“You can’t spirit away market risk, but you can sensibly manage it.”
RELATED ARTICLES
About the author
About the author
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
