<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The number of baby boomers moving into retirement is growing and yet the level of mandated superannuation available to provide sufficient retirement funding for this group is relatively low. This unique group is more sensitive to negative cyclical events and to the impact of sequencing risk through their superannuation as part of their move to retirement.</p>
<p>Within the context of Australian superannuation, Industry superannuation accounts represent 17 per cent of the over two trillion dollar superannuation asset base, with the majority of these fund members automatically investing in high-risk “default investment strategies” as part of their MySuper contribution arrangement. This paper investigates the implications of sequencing risk for baby boomers, as typical members in these funds, how financial market volatility directly impacts on retirement outcomes and shows that investment results are sensitive in the retirement-drawdown phase.</p>
</abstract>

The number of baby boomers moving into retirement is growing and yet the level of mandated superannuation available to provide sufficient retirement funding for this group is relatively low. This unique group is more sensitive to negative cyclical events and to the impact of sequencing risk through their superannuation as part of their move to retirement.
Within the context of Australian superannuation, Industry superannuation accounts represent 17 per cent of the over two trillion dollar superannuation asset base, with the majority of these fund members automatically investing in high-risk “default investment strategies” as part of their MySuper contribution arrangement. This paper investigates the implications of sequencing risk for baby boomers, as typical members in these funds, how financial market volatility directly impacts on retirement outcomes and shows that investment results are sensitive in the retirement-drawdown phase.

Sequencing Risk for Baby Boomers: Prosperity or Poverty<xref ref-type="fn" rid="j_fprj-2017-0003_fn_001">*</xref>

Financial Planning Research Journal

This work is licensed under the Creative Commons Attribution 4.0 International License.

Sequencing Risk for Baby Boomers: Prosperity or Poverty

The number of baby boomers moving into retirement is growing and yet the level of mandated superannuation available to provide sufficient retirement funding...

	SDIO		LIO		100% DIO		100% GIO
	Mean, μ Percent	Standard Deviation, σ	Mean, μ Percent	Standard Deviation, σ	Mean, μ Percent	Standard Deviation, σ	Mean, μ Percent	Standard Deviation, σ
2000:2009	5.86	14.29	6.13	13.05	6.7	2.83	5.5	20.81
2004:2013	8.73	15.21	8.67	13.87	6.3	3.0	8.4	22.87

	Capital Stable/Conservative	Balanced	Growth
Cash	25	5	5
Australian fixed interest	35	15	10
International fixed interest	10	10	5
Listed property	5	10	10
Australian shares	15	35	40
International shares	10	25	30

Defensive Assets				Growth Assets
Investment option	Cash	Australian fixed interest	International fixed interest	Listed property	Australian shares	International shares
SDIO	5%	10%	5%	10%	40%	30%
LIO	7%	13.5%	6.5%	9.5%	36.5%	27%

	Age 60	Age 65	Year 1 & 2	Year 3 & 4	Balance
⇧	10% Cash		Use Cash	Use Balanced	Retain
⇧	20% Balanced	Retire	Reserve	Reserve	Growth
⇩	30% Growth		10%	20%	70%

Sequencing Risk for Baby Boomers: Prosperity or Poverty*

Online veröffentlicht: 18. März 2024

Seitenbereich: 48 - 57

Eingereicht: 19. Sept. 2016

Akzeptiert: 05. Dez. 2016

DOI: https://doi.org/10.2478/fprj-2017-0003

© 2017 Loretta Iskra et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

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