Australia
Melbourne, 4 August 2010

Mercer has launched a new retirement calculator to help members ‘stress test’ their superannuation by modelling the impact that share market volatility or a career break will have on their retirement savings and income.

Mercer’s Retirement Income Simulator, which has been launched to the 250,000 members of the Mercer Super Trust, provides an analysis of an individual’s or a couple’s retirement readiness. It is one of the most advanced retirement calculators available as it allows members to see what impact variables like salary, investment strategy, voluntary contributions, rollovers, career breaks and retirement age could have on their retirement income.

Heather Dawson, Partner at Mercer, said retirement calculators are a valuable tool to engage superannuation members and help them understand how much income they will have in retirement - and how long it will last.

“Increasing member engagement is one of the greatest challenges for every super fund. One of the most effective ways to do this is to provide people with easy tools to enable them to plan for their retirement future using their own personal circumstances. This is why we’ve developed a simulator which gives members a complete picture of their finances in retirement,” Ms Dawson said.

Unlike many other calculators which focus only on superannuation account balance, the Mercer Retirement Income Simulator emphasises the importance of an adequate and sustainable retirement income from all sources, presenting results in today’s dollars.

“Mercer’s Retirement Income Simulator is an easy to use online tool that provides a personalised forecast that takes into account all income sources and allows members to apply various strategies to bridge any gaps.

“It’s very powerful for members to see how their contribution patterns and investment strategies can influence the income they will have in retirement – it gives them greater knowledge and impetus to get retirement ready. For example, most people don’t realise that delaying retirement by just one year can stretch their super two years further in retirement. Mercer’s Retirement Income simulator shows people in very clear terms what they can achieve by working longer or saving more.”

Ms Dawson said Mercer’s Retirement Income Simulator featured a ‘stress-test’ which helped members to see the impact of stock market movements on their retirement income.

“Australians are now more attuned to the impact that share market volatility has on their superannuation balance but we felt it important to help them understand the impact over time and on their actual income in retirement.

“Mercer’s ‘stress test’ is based on ten different randomly-selected return scenarios for each investment option, sourced from Mercer’s Capital Market Simulator investment model. The simulator updates the member’s projection based on these returns, so they see up to ten possible outcomes under a fluctuating market. Essentially, it helps members run the numbers from best case to worst case scenario and empowers them to better prepare for their retirement,” she said.

Mercer’s Retirement Income Simulator is available to Mercer Super Trust members and is accessible via its secure website.  For accumulation style members, data is pre-populated with the individual member’s data and provides a rich graphical experience that allows members to interact with the web page and see the impact in real time. It allows members to include their spouse's details to estimate their combined retirement income, include income from non-super investments, calculate Age Pension entitlements as well as run the ‘stress test’.

“Mercer has made a substantial investment in developing our online simulator and personal advice capabilities to offer our large super fund clients and the Mercer Super Trust with this leading edge product and we have received great feedback from clients regarding the innovative and leading edge features,” Ms Dawson said.