Superannuation retirement balances: A surprising outcome

Cohen,MB 2014, Superannuation retirement balances: A surprising outcome, Australasian Journal on Ageing, vol. 33, no. 4, pp. E41-E45, doi: 10.1111/ajag.12094.

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Title Superannuation retirement balances: A surprising outcome
Author(s) Cohen,MBORCID iD for Cohen,MB
Journal name Australasian Journal on Ageing
Volume number 33
Issue number 4
Start page E41
End page E45
Total pages 5
Publisher Blackwell Publishing
Place of publication Richmond, Vic.
Publication date 2014-12-01
ISSN 1440-6381
Keyword(s) Financial literacy
Monte carlo method
Retirement planning
Summary Aim: Although the guaranteed superannuation system is believed by many to provide a safe and adequate source of funds in retirement, some will be unpleasantly surprised. The aim of this paper is to demonstrate the significant effect of the economic cycle on the final accumulated balance in superannuation retirement accounts. Method: A Monte Carlo simulation is used to illustrate the variance in outcomes that can be expected for a hypothetical individual. Results: The expected accumulated superannuation balances for two hypothetical individuals are estimated. The spread of outcomes is used to illustrate the problem of using only the mean of the distribution as a predictor of wealth in the retirement years. Conclusions: Many retirees rely on superannuation to fund their retirement. However regular contributions to superannuation does not ensure a predictable outcome, and active management of contributions is required if retirement goals are to be met.
Language eng
DOI 10.1111/ajag.12094
Field of Research 150205 Investment and Risk Management
Socio Economic Objective 919999 Economic Framework not elsewhere classified
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2014, Blackwell Publishing
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Document type: Journal Article
Collections: Faculty of Business and Law
Deakin Business School
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