Thanks to increasing longevity, many retirees can now enjoy the prospect of an extended “sunset” stage of life. But what are the implications for retirees’ investment strategies and spending decisions? This View explores some of these issues from a risk-based perspective.
Watson Wyatt strongly supports the introduction of mandatory benefit projections, currently being considered by ASIC. We believe it’s a positive step in helping members to understand the level of retirement income they are likely to receive.
In planning for retirement, some questions that readily spring to mind are—what level of retirement income will I need, how long will this income need to last and have I saved enough to retire? However, just as important are how will I invest my retirement savings once I retire and will I qualify for any age pension?
There has been much focus in recent times on adequacy of retirement savings. Is the Superannuation Guarantee (SG) adequate? Should the SG level be raised? If so, to what level, 12%, 15%? How much should I be saving? These and similar themes have been gaining more prominence over the last couple of years.
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