Analysis of QSuper’s membership data has provided evidence that the Association of Superannuation Funds of Australia’s (ASFA) benchmark of how much money people need for a comfortable retirement is not unreasonable.
According to Dr Helen Johnson, data scientist at QSuper, the actual amounts people draw in retirement from account-based pensions are around the ASFA comfortable standard ($42,861 for a single person and $58,784 for a couple), with QSuper’s numbers as being consistent if the age pension is taken into account.
“There have been some surprises about what people do when they get to retirement, but also there’s a lot of confirmation in what we see. The amounts people are drawing aren’t necessarily crazy, it’s more or less what you would expect for people living a relatively conservative lifestyle in retirement,” Johnson said.
Johnson, who has a PhD in statistics, has been working in the fund’s investment liabilities team, analysing membership data to help set more appropriate and informed investment strategies.
“By using the information we have on our members we are able to create better retirement and investment strategies that suit their needs rather than just naïvely creating products that we think people need, without understanding what they are doing,” she said.
She added that everything they have done on this over the last five years has been from the bottom up, going from the membership base right through to what the investment strategy should be, rather than from a top-down approach.
“A lot of my time is spent analysing data in accumulation, but my role more recently has been modelling membership data in retirement, or what people are doing as they approach retirement. Trying to look at this in some kind of longitudinal sense as well so we can model trends, what people are doing through time in their retirement phase.”
Johnson will be presenting at ASFA’s annual conference next week, which runs from Nov 25–27. She will be talking about the analysis done within the fund, with a particular emphasis on what members are doing in the lead up to retirement and their behaviour as they enter a pension account.