Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Lawyers warn of the growing risks to retirees caused by loans to their children and disputes with family members about who gets what from a will.
Rising cost of living has pre-retirees ‘fearing’ financial future
Retired Australians are enjoying life, but it’s a different story for those approaching retirement, according to the latest Challenger Retirement Happiness Index.
The index found that those on the cusp of leaving the workforce were feeling more anxious about their financial future, their confidence taking a hit over the past year. No doubt the market turmoil of the past month has compounded their fears.
While overall happiness remains strong, pre-retirees are feeling the squeeze, with rising living costs and a lack of financial certainty clouding their outlook. Those in retirement reported higher scores of happiness compared with pre-retirees, but cost-of-living pressures are impacting confidence across the board.
Three in four pre-retirees (76 per cent) and 72 per cent of all Australians who are 60+ say the rising cost of living has affected their financial security, with a third noting a significant impact.
While the overarching index score edged down slightly to 69 (down from 70 in 2024), the key drivers of retirement happiness remained unchanged including activities (80), mental health and wellbeing (75) and a sense of purpose (72).
The second annual Challenger Retirement Happiness Index, developed in partnership with the independent research provider, YouGov, surveyed 1,633 Australians aged 60+ to track factors driving retirement happiness.
Commenting on this year’s findings, Challenger chief executive, customer, Mandy Mannix (pictured), says: “Ask a happy retiree what brings them joy and they won’t just talk about their super balance. They’ll talk about the coffee catch-ups, the morning walks and the holidays they have planned to visit family or see the world. The little things make a big difference – which is why activities and purpose are so important.”
Three factors stand out when Australians 60+ are asked what makes them happy: good physical health (59 per cent), enough money to enjoy life (41 per cent) and good mental health (38 per cent).
The index found women and unadvised Australians were facing the highest barriers to a confident retirement. A third of women 60+ are “extremely” or “very worried” about outliving their savings compared with 20 per cent of men.
Unadvised Australians are twice as likely to be “extremely” or “very worried” about outliving retirement savings (35 per cent compared with 19 per cent).
“We know retirement can be one of the most rewarding stages of life – but confidence is key,” Mannix says. “When people feel uncertain about their finances, they tend to hold back. That’s led to a chronic underspending problem in retirement, with many Australians living more cautiously than they need to.
“Retirees go from a steady pay cheque to a lump sum, and that sudden shift makes it hard to budget with confidence. That’s why a guaranteed, regular income for life is so powerful – it replaces that pay cheque, can keep up with inflation and gives retirees the freedom to live their best life in retirement.”
The research revealed that better guidance and simple education could be key to helping Australians feel confident enough to spend and enjoy their retirement – without the fear of running out.
Three in four Australians aged 60+ believe better financial education would improve their happiness, but half say they don’t have the resources to plan for retirement. One in five – around 1.2 million retirees – don’t know where to start.
The index’s findings align with recent UNSW research that revealed 57 per cent of people don’t even know that lifetime income solutions exist, despite their ability to significantly improve confidence to spend in retirement.
With nine in ten unadvised (those who have never received financial advice) Australians wanting free, basic retirement education, there is a significant opportunity to improve financial literacy and help retirees feel more secure about their future. With the right education and income strategy, retirees could enjoy more freedom and financial security.
“Retirement confidence isn’t just peace of mind – it’s quality of life. When people feel financially secure, they spend, plan and live without that worry,” Mannix says.
