29 January 2025
Retirement is increasingly seen as a dynamic and staged transition rather than a one-off event. We’re helping shape, simplify and support members’ retirement journeys.
Over the next 10 years, an estimated 2.5 million Australians will move from saving for retirement to starting their retirement phase1. Currently, there are around one million AustralianSuper members who are retired, partly retired, or approaching retirement.
A new retirement
How we define and experience retirement is changing. In the past, when people retired, they generally didn’t return to paid work. Today, many people transition to retirement by gradually reducing their paid work commitments, while others continue to move in and out of paid work and retirement for a variety of reasons.
This flexible approach to retirement is reflected in AustralianSuper’s Retirement Cohorts Pilot Study which found that 40% of surveyed AustralianSuper members retired earlier than planned. For those who open a Choice Income account-based pension, 20% are still in the workforce or plan to return to the workforce2.
AustralianSuper’s Retirement Confidence Study of over 5,000 Australians delves deeper into the cultural shift we’re seeing around how people define and feel about retirement. In 2024, only 46% of Australians felt confident they will live well in retirement. The data reveals the strongest factors driving confidence are goal setting and planning (36%) and financial literacy and behaviours (33%). Health-related factors – social, mental and physical – have less of an impact.
The study also shows there is a gap between the expected and actual retirement age of Australians. While the planned retirement age tends to cluster around age milestones – 60, 65, or 70 – the reality is more varied.
Supporting members’ unique needs
Every member’s retirement is unique, but everyone wants to know they’ll be okay. Approaching retirement can be a complicated time, with both financial and life decisions to make.
Understanding the changing needs of Australians approaching, and in, retirement is critical. One thing that doesn’t change is that the biggest concern members have is how long their super will last.
AustralianSuper’s Annual Retirement Study, conducted by Nature in December 2023 shows that one-in-two pre-retirees worry they don’t have enough money to retire with, and three quarters of members approaching retirement don’t know what they’ll do with their super when they get there.
We’re listening to members and aim to make things easier with more tailored information, guidance and advice to help members feel confident to spend the savings they have worked so hard for when they retire.
Guidance and advice
Affordable, timely and appropriate information, guidance and advice helps members feel more confident about managing their retirement savings.
Over the last year, we expanded and enhanced the digital education services available for members including education videos, webinars, articles, calculators and other tools. In addition, thousands of members attended an in-person retirement seminar, accessed over-the-phone limited advice or comprehensive face-to-face financial advice via our national network of 3,600 financial advisers3.
Advocating for change
Super is delivering on its purpose to provide greater savings for retirement and ensuring Age Pension costs are sustainable for future generations. We need to build on our world-class super savings system4 to develop a world-class retirement income system that is simple, seamless and member centric.
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Flexibility is key
Members want flexibility and simplicity, and many have told us they struggle to navigate the complexities of a fragmented retirement income system, where income can come from multiple sources, including work, government benefits or private savings. Providing members with a view of all their retirement income sources will help them manage their savings more confidently.
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One simple account
Currently, when a member opens a retirement account, contributions cannot be made into that account. Allowing members to concurrently draw an income, after they meet preservation rules, and to continue making contributions will help them to maximise their retirement income.
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Help when it’s needed
Retirement research conducted by Link Group found that 72% of respondents wanted their super fund to assist with their application for the Government Age Pension (GAP)5. Allowing super funds to assist, on the request of a member, with GAP eligibility assessments and applications, and managing their different sources of income, would go a long way to boost confidence in retirement.
Retirement confidence tips
Key insights from the 2024 Retirement Confidence Study, which surveyed more than 5,000 Australians, highlights the significant impact of effective planning and money management on retirement confidence. Following are some tips to boost retirement confidence:
- Start the conversation: Have open discussions with your loved ones about your retirement plans and goals. Sharing your thoughts can provide support and reassurance, helping everyone feel more prepared.
- Set clear goals: Determine how much you need to save for a comfortable retirement and create a savings plan to help you reach those goals. AustralianSuper provides a range of tools, and calculators to help you visualise your goals, look at your projections and help you see any gap and how you can grow your super to meet your goals.
- Ease into retirement: Consider a phased approach to retirement, gradually reducing your work hours or transitioning to part-time work. This can make the transition smoother and less stressful.
- Budget with care: Create and stick to a budget, save and pay down debts where you can. This will help build financial security for your retirement.
- Get professional advice: Seeking professional advice can help you make well informed decisions and develop a plan to maximise your retirement savings and investments.
References:
- Treasury, Retirement phase of superannuation Discussion paper, December 2023, p6
- AustralianSuper: Retirement Cohorts Pilot Study, 2023
- Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Fees may apply.
- Mercer CFA Institute Global Pension Index 2024, October 2024. Australia is ranked 6th out of 48.
- Retirement Reality: Advice and the Age Pension Whitepaper, Link Group, July 2022, p 5.
- AustralianSuper The Retirement Phase Response to Treasury Discussion Paper: Retirement Phase of Superannuation, 9 February 2024.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.