The problem with the Federal Election outcome for retirement planning is that individuals may use it as an excuse to procrastinate. Political (or Sovereign) risk is simply another uncertainty – like the length of life or the rate of return on investments. The actuarial skill set is useful to achieve the desired outcome – even if one is forced to tack and jibe along the course. The major risk is inadequate resource at retirement from lack of planning.
NetActuary has developed a comprehensive new calculator to assist planners evaluate the assets required at retirement and what is likely to accumulate under the current retirement plan. This can be used to evaluate and address any gap or shortfall in provision.
We are going beyond this. We are developing calculators that allow one to contrast current and potential/implemented legislative changes. It provides a measure of risk and importance for that individual. In a para-plan I put together yesterday, the $1.6m limitation – or Labor’s alternative – was irrelevant. The potential reduction from $35,000 to $25,000 for concessional contributions was a non-issue and the TTR potential changes were adverse, but not a major issue. The rate of return over the next decade is a vastly larger risk factor than the legislative environment for this couple. The Age Pension entitlement was reduced after 01/01/2017 but had some offset later in retirement. This is the next “contrast” calculator we will develop.
NetActuary is getting serious about providing adviser technical and computation support. This is feasible now because of the additional resources we have recently added. The above is being developed in the context of the white label/branded calculators being expanded to include direct lead generation links and messages. We also will be working closely with the planners using these services to get cost efficiencies by either SOA automated generation or from para-planning SOAs. A support sub-website is being developed.
The next blog will show more detail.
The NetActuary Team