November 2, 2020 by Jassmyn Goh (Money Management)
The impact of the Government’s early access to superannuation hardship scheme might only be $8.50 per week in terms of today’s spending power, mSmart believes.
The fintech platform’s founder and chief executive, Derek Condell, said the super industry did not have any tools that could predict spending power of retirement cashflows in the future with comparisons.
“Many people will be surprised to learn the impact of early release is not as bad as has been reported by the industry. It might only be $8.50 per week when expressed in terms of today’s spending power,” he said.
Condell said super members did not have to make more contributions to recover their spending power that was impacted by the early release scheme but could instead tilt their investment strategy towards growth options.
He noted that forecasts that failed to explain lump sums and income projections in terms of today’s spending power could be meaningless.
Traditional methods, the firm said, focused on the lump sum at preservation age based on generic asset allocations that did not explain the probability of different outcomes and that scenario modelling was very limited.
mSmart said it launched its super report tool mProjections to project retirement cashflow from different investment options.