The way the industry looks at retirement is out of focus, says Eraj Ghafoori, a behavioural economist at AustralianSuper. While financial factors form a solid objective baseline, they are only part of the retirement confidence kaleidoscope.
“Everybody in the industry is looking at how much money consumers are saving, what are their assets and liabilities, how much they’re spending, what’s in their super, what are their additional contributions – and then they project and compare them to basically predict whether you are confident or not,” Ghafoori says.
The problem with this, he laments, is that it focuses only on the “purely objective financial aspect”.
The concept of confidence is less about what you have, he says, and more about how it affects you.