Australians approaching retirement are financially engaged, but many have not prepared for life after work, TAL research finds
TAL
- A third of pre-retirees have taken no action to prepare for retirement, and one in five don't know what they'll do with their superannuation, despite being highly engaged with their finances.
- Cost of living pressures are affecting retirement planning, with only 29% of pre-retirees having money left over for regular saving or investing, and the proportion planning to work past age 70 rising from 27% in 2024 to 36%.
- Retirement frequently arrives earlier than expected, with 61% of current retirees having left the workforce before age 65. Only 15% of pre-retirees anticipate retiring that early, a significant gap between expectation and financial reality.
- Retirees who chose pension accounts or lifetime income products reported considerably higher satisfaction (90%) compared with those who withdrew lump sums (66%), yet only 38% of pre-retirees are familiar with how these products work.
- Super funds are well-positioned to address the retirement planning gap, with 64% of pre-retirees trusting their fund to advise on retirement needs.
The second edition of TAL’s What I Wish I Knew About Retirement found a third of pre-retirees have taken no action to prepare for retirement and one in five don’t know what they'll do with their super. This is despite two thirds reporting they are engaged or highly engaged with their finances.
The research, comparing the attitudes, experiences and behaviours of 2,000 pre-retirees and retirees aged 55 and older, shows an increased focus on financial certainty among pre-retirees compared with when the research was first conducted in 2024. When asked to nominate the most important features of a retirement product, two thirds list ‘an income that lasts a lifetime’ and ‘income keeping pace with inflation’ among features they value most.
Shaun Bransdon, General Manager, Retirement and Wealth at TAL said the findings show a disconnect between people’s financial engagement and taking action on retirement planning, with more seeking financial certainty.
"People care deeply about their financial futures and they're paying attention - but we don’t see that in the actions they’re taking to plan for this critical life stage. Many feel they don’t have all the information they need."
"Super funds are stepping into this opportunity, building on the trust developed with members over their working lives: 64% of pre-retirees say they trust their fund to advise on retirement needs. Options like guided settings, information on how different retirement income options work together with the Age Pension, and tools that help them make decisions that suit their circumstances, could help more Australians approach retirement with confidence."
Preparing for retirement, and the unexpected
This year’s research shows that cost of living pressures are impacting retirement planning, with just 29% of pre-retirees saying they have money left over for regular saving or investing. Almost half expect to have less spending power in retirement. The proportion of pre-retirees planning to work past age 70 has also jumped from 27% in 2024 to 36%.
While 33% of pre-retirees expect their retirement to last longer than 20 years, almost half expect their super to run out before then. Nearly half of retirees surveyed (48%) had taken no meaningful action to prepare for retirement, up from 39% in 2024. Among retirees who did plan for retirement, only a quarter started preparing before their 50s, with over one-third not taking action until their 60s or later.
This is significant because retirement often arrives earlier than expected - 61% of current retirees left the workforce before 65. Only 15% of pre-retirees expect to retire before 65.
That gap between expectation and reality can have lasting consequences, said Mr Bransdon.
"If you're planning to work until 67 but have to leave at 62, you've lost five years of contributions at peak earning capacity. For many, that's significant."
Product choice and certainty shape retirement satisfaction
The research reveals significant differences in satisfaction based on what a person did with their super on retirement.
Around 90% of retirees who chose pension accounts or lifetime income products were satisfied with their decision. This compared with 81% who left their super in accumulation and 66% who withdrew lump sums.
Yet just 38% of pre-retirees are familiar with how these products work and 87% would want to find out more if their fund offered a lifetime income product. Among current retirees, 66% say they would have been interested if such products had been clearly offered when they retired.
Among retirees now in their 80s, one in five wish they'd spent more in their early retirement years. If retirees started running out of money, 40% say they would reduce spending and 34% say they would rely on the Age Pension, which for many household types sits below ASFA's modest retirement standard.
“Retirement income strategies work best when flexibility is combined with certainty. And our research shows this is increasingly important to people. Account-based pensions provide growth potential and capital access for active years, while lifetime income streams support spending confidence and can reduce Age Pension reliance.”
“Without certainty about future income, even retirees with adequate savings may default to conservative spending. Product design can help – giving people confidence to enjoy their retirement while knowing their essential needs are covered,” Mr Bransdon said.
The full report, What I Wish I Knew About Retirement: Second Edition, is available at www.grouphq.tal.com.au/retirement.
About the research
The second round of TAL’s What I Wish I Knew About Retirement research was an online quantitative study of 2,000 Australians aged 55 or over, comprising 873 pre-retirees and 1,127 retirees, who provided self-reported answers to survey questions. The first round was conducted in 2024; the second completed in 2026 by TAL’s research partner Edentify.
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About TAL
TAL is one of Australia’s leading life insurance specialists. For over 150 years, TAL has been protecting people, not things. Together with its partners, TAL insures more than 5 million customers and offers life insurance through the following channels: direct to consumer; through a financial adviser; and via group and workplace superannuation schemes. TAL is part of the Daiichi Life Group, one of the world’s largest insurance groups.
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