The Retirement Savings Tool is available on the Apple App Store and the Android Market.
Empowering retirement fund members to take control of their retirement savings and improve their retirement outcomes.
For over two years, Alexander Forbes has published the Alexander Forbes Pensions Index which tracks how projected retirement incomes of defined contribution fund members have changed over time.
But the Index was based on a very specific set of parameters, like a contribution rate of 13.3%, which meant that while it gave a very general indication of how projected retirement outcomes were changing, many members would struggle to relate to the four savers that the Index follows.
Whilst most retirement funds typically target a replacement ratio of 75%, members are rarely given the opportunity to see whether they are on track to achieve this target. That is why Alexander Forbes has created the Retirement Savings Tool.
The intention of the Retirement Savings Tool is to make the calculation of retirement outcomes accessible to retirement fund members so that they can take action to improve their outcomes if they are falling short. The tool is available as an application on smartphones and as a computer-based tool. The advantage of a smartphone app is that it is available to members when they are making critical retirement funding decisions like deciding on their contribution rate and retirement age at the point of joining a new employer or amending their funding choices. An application of this sort gives members the ability to see the long-term implications of the decisions they are making now.
Users will be required to fill in some basic information about themselves, like their current age, current retirement fund savings and their intended retirement age. The tool then shows members how far off they are from a target of 75%, in rands and cents terms, under three different return scenarios. The tool also provides information on the measures that members can take to improve their retirement funding position, for instance, “what additional monthly contribution will they be required to make in order to reach their 75% replacement ratio target?” Retirement fund members are also encouraged to contact a financial advisor for advice on how to get back on track for a comfortable retirement.
To download the app, visit the Apple App Store or the Android Market and search using the keywords “Retirement Savings Tool”.