Consumer group challenges reality of ASFA’s Retirement Standard
The validity of one of the longest-standing measures of retirement income adequacy, the Association of Superannuation Funds of Australia (ASFA) Retirement Standard is being challenged by an off-shoot of consumer group Choice, Super Consumers Australia (SCA).
The consumer group has flagged that it is developing its own set of retirement targets which it believes will be more useful to consumers because it is based on what people actually spend.
The ASFA Retirement Standard has been in use for nearly two decades but Super Consumers Australia has stated via a Choice publication that it sets an unrealistic target for many.
“The current standards, developed by an industry lobby group and widely used by the media and financial planners, set an unrealistic target for many,” SCA said.
“Remember that saving too much isn’t without consequences – you could be living a lower quality of life during your working years to save more than you’ll ever need in retirement,” it said.
The SCA retirement income adequacy approach is being informed by work it has undertaken with research firm, Fiftyfive5 to find out how Australians plan for retirement.
The group announced last July that the research was intended to help develop a new set of retirement targets to guide how much people would need to save for retirement.
SCA has previously described the ASFA Retirement Standard as being a marketing tool for the superannuation industry and has referenced the Australian Council of Social Services as having suggested the Retirement Standard pushes a luxury level of retirement involving regular trips overseas, restaurant meals with good wines once a week, major upgrades to the home”.
SCA is planning to release its own retirement targets tool early this year.
The most recent ASFA Retirement Standard covering the September quarter of last year suggested that couples aged around 65 living a comfortable retirement needed to spend ^63,799 per year and singles $45,239 a year