Retirement calculators – the flaw of averages

Retirement calculators wp-coverRetirement calculators – the flaw of averages

Jeremy Cooper’s view on how retirement calculators, available on almost every superannuation fund website, are failing by focusing on a constant ‘average’ return rather than the wide range of possible returns.

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One Response to Retirement calculators – the flaw of averages

  1. Mark Hayden April 8, 2016 at 10:33 AM #

    It is disappointing that some people mis-use statistics to sell a story, or a product. The quoting of the standard deviations for one year returns is dramatic but of far less importance than the standard deviation of rolling 10 year returns. There is a vested interest in over-complicating long-term investment matters. There are flaws in that article and the graph is for a one-off investment which has minimal relevance to retirement calculators which include contributions and/or drawdowns. I welcome the review of retirement calculators but do not agree with the request for consumer testing (very few consumers have access to the real facts). I recommend rational and healthy debate on long-term investments.

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