Five hidden truths about the realities of retirement in Australia

Australian retirees have been living with high inflation for several years, characterised by higher interest rates, increased living costs and weak economic growth. So how are you feeling about retirement? 

The cost of living remains a chief concern for all Australians, and it’s the biggest worry for two in three retirees, according to new research about retirement* commissioned by CFS.  

Our research reveals some hidden truths you may be surprised to know about your fellow retirees. 

How do Australians generally define what makes for a comfortable retirement?

The picture that emerged from our research includes being able to eat out regularly, perhaps at restaurants rather than the local café, taking day trips to nearby attractions rather than being limited to free community activities, and being able to take a holiday in Australia – at least annually. 

What does a comfortable retirement look like?

Percentage of Australians who consider this activity part of a comfortable retirement

Are you getting what you’re entitled to? Learn more about the Age Pension or check your eligibility.  

While you’re at it, check you’re not making any of these other common retirement mistakes. 

How do retirees spend their money? Most often, it’s on essential living expenses, followed by healthcare and medical, and transportation costs 

Saving for unexpected emergencies edges out spending on leisure activities, holidays and home repairs, reflecting many retirees’ worry about potentially running out of money. 

And almost one in four Australians who have already retired are still using their pension to pay off debt. 

The government’s Moneysmart website offers advice to help Australians of any age to manage debt, including offering financial counselling. 

It’s also important to pay close attention to how your super is invested early in retirement. While it’s generally accepted you should start reducing risk in the lead up to and entering retirement, being invested too conservatively could end up costing you in the long run. 

Log into your account to find out the risk profile and return of your investment options. 

Contrary to what some might expect, how people feel about retirement generally improves with age.  

Cost pressures are felt more keenly by those aged between 65 and 74, while Australians aged over 75 are more likely to say a comfortable retirement is possible. 

Overall, two in three retirees say they are currently able to enjoy a comfortable retirement.  

Those who have never obtained financial advice, or who don’t own their own home are more likely to be worried about running out of money. 

It’s never too late to take steps to plan for your retirement. Learn more about the financial considerations that may be open to you – including tax-saving strategies, income stream options and estate planning – on our Retirement Hub. 

One in five Australians who have retired feels unprepared for retirement.  

How you manage your finances is critical to good long-term retirement outcomes, but retiring is about more than money.   

“No one is prepared to retire emotionally,” one retiree said.

No matter how far into your retirement you are, it’s important to take a holistic approach to your retirement planning, encompassing things like: 

• sense of purpose 
• wellness 
• social and community connection. 

Consider pursuing a passion project, or volunteering in some way. 

When it comes to wellness, the Australian government provides guidelines on physical activity for older Australians, as well as diet and how to look after your mental health. A good place to start may be talking to your GP.  

The positive effect of financial advice on retirement preparedness is clear: almost nine in ten advised Australians feel they are on track to reach their retirement goals compared with less than half who have never received advice. 

Those who do receive advice are significantly better off, and are: 

1. Twice as likely to know how their super is invested 
2. Much more likely to say they are on track to achieve their retirement goals  
3. Twice as likely to feel financially prepared for retirement  
4. Twice as likely to retire at a time of their choosing. 

Our customer guidance team offers members free consultations to help you maximise your retirement outcomes no matter what age or stage you're at. Book a call if you would like to speak to one of our consultants.