Home' Superfunds : Superfunds October 2017 Contents Many superannuation funds see themselves as a fund for life.
Much time and resources are spent on helping members
to grow their super in the accumulation phase. Ageing
memberships also mean more time and resources are now being
spent on the retention of members at retirement.
But how well are super funds catering to the needs of members in their
post-work lives to ensure they truly are a fund for life? What are the needs of
ageing members and how can funds best engage with them?
RETIREMENT HAS RETIRED
Retirement is now viewed as a ‘second act’ where personal growth,
expansion, learning, socialising, and contributing to the community are
important in ensuring a happy (and long) retirement. It’s no longer just about
recreation. The concept of retirement as ‘slowing down’ (and sometimes
viewed as ‘retiring from life’) is dead.
So, too, is the idea of being in full-time work one day and retired the next.
Now, the journey into retirement might mean transitioning through part-time
or contract work, a late in life career change, starting a business, volunteer
work, or taking up further study.
This ‘new retirement’ changes what funds should communicate, the
modes of delivery, and the supporting services they offer to members.
Increasingly, there is emphasis on planning for retirement holistically, taking
into account relationships, health and wellbeing, as well as finances. Retirees
want a fulfilling and meaningful post-work life, not a perpetual holiday.
NOT ONE HOMOGENEOUS GROUP
Super funds have historically viewed retired members as one homogeneous
group, but ageing members are incredibly diverse. Think about the needs and
lifestyle of someone in their 60s compared to someone in their 90s. Then add
in the complexity of personal circumstances – someone in their 60s bringing
up teenage children in a blended family with a mortgage and school fees has
a completely different set of needs and interests to a debt free 60 year old
with adult children and grandchildren.
The importance of segmentation and tailored, personalised communication
is just as important in the post-work phase as in the accumulation phase.
Member profiling and segmentation based on behaviours rather than physical
age is important. And its importance is going to grow given the post-work
cohort is getting bigger as our population continues to age.
FEAR OF OUTLIVING SAVINGS
One of the biggest fears of retirees is outliving their retirement savings.
With rising lifespans, members can now look forward to up to 40 years in
retirement. At the same time, more and more retirees are still paying off a
mortgage, many are still supporting adult children, the divorce rate amongst
retirees is increasing, and many are forced to retire earlier than they would
The role of property as a retirement asset is also undergoing generational
change. Many of today’s retirees own prime land or inner-city property, and
they’ve had strong capital growth since 1992 – giving them the choice of
downsizing or leveraging that asset for retirement income purposes.
The next generation of retirees will be in a different position. For them,
housing is increasingly out of reach, which means they’ll need to rely on their
super or other investments as the primary income for retirement, which may
include paying rent.
Funds can assist members in addressing both a shortfall in savings and
ensuring available funds last as long as possible.
AGE IS ABOUT MINDSET, NOT PHYSICAL AGE
The concept of ageing is being reinvented. Good health is viewed as
something that can be maintained for longer, and so, if you’re living a
healthy lifestyle, age is more about mindset than physical age. Many people
in their 60s do not consider themselves old (it’s the new 40s), and 70 is
the new 60. Unfortunately, 80 is pretty much still 80 because of declining
health, but the point is, retirees don’t see themselves as old until declining
health plays its part. Leading funds recognise this by engaging members with
lifestyle-based communications that talk to members’ interests, rather than
communications that are triggered primarily by regulatory change.
Superfunds October 2017
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