With so much conflicting information and threatened changes around retirement incomes does this help or hinder your work with consumers?
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We continue to see commentary from various participants in financial services, that provide inconsistent information for consumers. This is largely because the information provided is based on assumptions and averages. One of my great mentors used to use a great anecdote to explain why averages can be very misleading and dangerous. He said "If you put your head in the oven and your feet in the freezer, on average you feel pretty good!"
The most important thing missing from all of these opinions is an understanding of how it impacts everyday people directly. We simply cannot know the specific impact that changes to the Age Pension will have on retirees. Generally, we know that some will be better off and others will be worse off. But how much more they need to save or whether it has an impact is a complete guess. The only way to determine these impacts is to understand the retirement income requirement of the particular consumer and what their goals are.
What these commentaries do is create more uncertainty for consumers, which is not very helpful. When I work with clients, what they do find helpful, however, is to create a picture of their financial future, so that they understand the long term impact of these changes on their specific personal situation. That way they have a lot more certainty and they can get on with the important things in their lives.
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