A Tasmanian-based actuarial services firm has launched a calculator designed to help retirees convert superannuation savings into an annual budget, after pointing out there is not enough financial guidance for those heading into the retirement income phase.
Apricot Actuaries stated the calculator, titled Jubilacion after the Spanish word for retirement, has been created to calculate how much money retirees can spend in each year of retirement to live comfortably, while also taking in different factors including lifestyle goals, market changes and personal health.
Company founder and chief executive Jim Hennington said Jubilacion has been designed to consider all factors to ensure a person can live a financially comfortable and safe retirement.
“Jubilacion’s software considers all the factors, crunches the numbers, and using our risk models, determines a safe spending number,” Hennington said.
“We call this our Financial Freedom Report. This is hugely empowering for people as they approach retirement. Many are pleasantly surprised to learn that they are better off than they realised, while others simply sleep better at night knowing their finances are in control.”
He said there have been limited resources available to guide retirees on how to convert lump sums, including superannuation, into a retirement income.
“Super funds aren’t helping people understand what these numbers are. Financial product advisers focus on the wealthy and average consumers don’t get much confidence from trying to interpret the inputs and outputs from online calculators,” he said.
“A problem with the way superannuation currently works is people are expected to know how to take their total retirement savings and use it to fund a good living standard for the rest of their lives. However, the maths to do this is hard.
“People don’t know how long they will live, what markets will do or how much living standards will increase. There is a mathematical link between the big decisions like when to retire and how much they can afford to safely spend each year for the rest of their lives.”