Australians are dramatically changing their retirement expectations, delaying their exit from the workforce by up to four years as the cost-of-living crisis wreaks havoc on financial plans. According to Colonial First State's latest retirement report, the average desired retirement age has shifted from 62 to 66, reflecting the harsh economic realities facing many workers.
Key Findings from the Report
More than half of those surveyed worry they will not have enough money to live comfortably in retirement, while 50 per cent fear unexpected health or aged care costs. A further 37 per cent are concerned they will outlive their superannuation savings. The amount Australians believe they need for a comfortable retirement has jumped significantly, with workers now estimating they need an additional $183,000 in super, pushing the required balance above $1 million for the first time.
Colonial First State executive director of retirement and growth Marissa Powe explained that persistent cost-of-living pressures are driving these concerns. "Australians are understanding that cost-of-living continues to increase, there's the cost of aged care and healthcare," Ms Powe said. "They are just taking that all in knowing their retirement savings and super will need to go further than it ever has before."
Economic Context
The research follows official data from the Australian Bureau of Statistics showing yearly headline inflation fell from 4.6 per cent in March to 4.2 per cent in April, partly due to temporary government measures such as halving the fuel excise. However, the trimmed mean inflation rate, closely watched by the Reserve Bank, rose to 3.4 per cent for the 12 months to April, indicating ongoing underlying price pressures.
The Role of Financial Advice
The report also found that more than three-quarters of Australians who receive financial advice feel prepared for retirement, compared with less than half of those without an adviser. Colonial First State Superannuation chief executive Kelly Power emphasised the importance of accessible advice. "Planning for retirement is complex, but the path forward becomes much clearer with the right support in place," Ms Power said. "That's why improving access to financial advice is critical. We strongly believe that reducing barriers to advice, like cost, will help more Australians get the support they need to plan and retire with confidence."
How Much Do You Need for Retirement?
Estimates vary depending on individual circumstances. According to the Association of Superannuation Funds of Australia (ASFA), a single 67-year-old homeowner now needs a lump sum of $630,000 for a comfortable retirement, while couples need at least $730,000, up from $690,000 previously. For a modest retirement, singles require $110,000 and couples $120,000, both increases from $100,000. These figures assume home ownership.
Super Consumers Australia (SCA) offers different estimates based on retiree spending surveys. A typical single retiree needs $322,000 in super to support annual spending of $44,000, while a couple needs $432,000 for $64,000 per year.
Gender Disparity in Retirement Anxiety
Women are disproportionately affected by retirement stress, with nearly two-thirds (62 per cent) worried about insufficient funds, compared with 48 per cent of men. Women are also more likely to fear unexpected health costs and outliving their savings (41 per cent versus 34 per cent). Despite some progress over three years of surveys, the gender gap remains significant. The proportion of women feeling prepared for retirement rose from 29 per cent to 43 per cent, while men's preparedness increased from 44 per cent to 59 per cent.
These findings highlight the ongoing challenges Australians face in securing a financially stable retirement amid rising living costs and economic uncertainty.
