Researchers from the Commonwealth of Scientific and Industrial Research Organization (CSIRO) and Monash University in Melbourne are putting the spending habits of retirees under the microscope in an effort to understand the finer details behind how they use and manage their superannuation in retirement, according to a release Monday.
"We're looking to understand what retirees need, how long their super lasts and what investment options and financial products might best suit them throughout their retirement so we can figure out how their super could work smarter," a CSIRO media release quoted CSIRO Research Leader Alan Dormer as saying on Monday.
"For example, what levels of confidence and security does superannuation provide to retirees, and how does it affect their spending behavior throughout their retirement? The way you spend your super in retirement makes a big difference to the type of risk you take when selecting your investment options."
Australia's aging population and growing pool of 1.6 trillion AU dollars (1.43 trillion U.S. dollars) in Superannuation is a national challenge and impacts anyone who has ever worked or employed anyone.
Michael O'Neill, chief executive of over-50s lobby, National Seniors, said he expected the research to debunk some of the super spending myths associated with older Australians.
"We expect claims that baby boomers are spending their super on living the high life, and then falling onto the pension, will prove unfounded," O'Neill said.
The Melbourne-based researchers will use big data analytics, social science, risk and economic modeling to answer questions such as how superannuation will affect the economy as it grows ever bigger, and how the country provides security in retirement for all Australians.
"The super system is maturing and changing and we need to start using an evidence based approach to understand what we need to do now and into the future to re-engineer super to best suit members and inform decision making at an industry and government level," Dormer said.
David Cox of Challenger Financial Services said Challenger Limited valued the independence, objectivity and real world problem solving focus of the Monash CSIRO research collaboration.
"CSIRO's big data capability provides the opportunity to shift superannuation research from assumptions based modelling to empirical analysis of relevant population cohorts so researchers, the industry and policy makers can gain new insight into what the superannuation system is actually delivering to retirees," Cox said.
The CSIRO-Monash Superannuation Research Cluster is a 9 million AU dollar (8 million U.S. dollar) research initiative bringing together researchers from CSIRO, Monash and Griffith Universities, the University of Western Australia and the University of Warwick in the UK.