Investment manager Challenger has introduced a new tool into the market to improve the knowledge of retirees and pre-retirees about their retirement income options.
The Retire with Confidence service is aimed at educating Australians to help them gain a better understanding of how a variety of income sources can fund their retirement. The issues it covers include the amount of age pension for which they might be eligible, how long their retirement income is likely to last and the role different investment instruments, such as a lifetime annuity, can play in improving their financial situation.
Ultimately, Challenger is hoping Retire with Confidence users will be better equipped to have a discussion with their financial adviser about their retirement income options.
“Planning for retirement is complex. There are a range of barriers that inhibit retirees when it comes to developing a comprehensive retirement income plan,” Challenger distribution, product and marketing chief executive Angela Murphy said.
“The Retire with Confidence tool aims to overcome those barriers by using a series of ‘reality checks’ that help to explain different retirement income options that may be available to retirees, encouraging them to consider their current financial plan and take action to talk to a financial adviser.”
The new aid asks individuals to estimate when their superannuation benefits will run out via gamification. Behavioural research conducted as part of its development revealed many misconceptions Australians have regarding their retirement, such as the belief their superannuation will last for the rest of their lives and how long they are likely to live.
“Integral to our vision to create financial security in retirement is engaging and educating older Australians about retirement income. Planning for retirement can be complex with a range of risks and options to consider. We wanted to create a tool for retirees that brought these elements together in a simple way to help build confidence and understanding about income options in retirement,” Murphy said.
Further, she noted the subject had gained increased focus due to the volatility in markets resulting from the coronavirus pandemic.
“The market shock from the coronavirus pandemic has put retirement income in the spotlight. Retirees without a guaranteed source of income may now be facing increasing uncertainty in an uncharted landscape,” she said.
