Most older Australians want the certainty of a guaranteed income in retirement, but the majority still do not know about lifetime income streams, new Challenger research has found.
The third annual Challenger Retirement Happiness Index showed 76 per cent of Australians aged 60 and over said they would be much happier if they had a guaranteed income for life in retirement.
Yet, 59 per cent said they did not know about, or had not heard of, lifetime income streams as a retirement strategy.
The findings, based on a February 2026 survey of 2,015 Australians aged 60 and above conducted with YouGov, pointed to a persistent disconnect between what retirees want in decumulation and what they understand about the tools available to deliver it.
That gap emerged even as overall retirement sentiment improved. Challenger’s Retirement Happiness Index rose to 69.5 this year, up from 68.9 in 2025, suggesting older Australians remained broadly positive about retirement despite ongoing financial pressures.
Challenger chief executive, customer, Mandy Mannix said the findings underscored the challenge of shifting retirees from accumulation to decumulation.
“Today’s retirees are the first generation having built significant superannuation savings. Yet, after decades of focusing on saving, many retirees find it surprisingly difficult to switch to spending once they retire,” Mannix said.
The report found financial certainty remained central to retirement wellbeing.
While physical health was ranked the most important factor in a happy retirement by 58 per cent of respondents, 44 per cent said having enough money to enjoy retirement was a top priority.
Retirees’ top savings goals reflected that focus: 72 per cent wanted certainty their money would last for life, 65 per cent wanted confidence to cover health and aged care costs, and 53 per cent wanted to maintain their lifestyle.
Cost-of-living pressure has continued to complicate that picture as 57 per cent of older Australians said rising costs were affecting their lifestyle, 54 per cent cited financial security, and 46 per cent said they were worried about running out of money in retirement.
Two in three respondents, or 67 per cent, said inflation and cost of living were the most important issues to plan for in later retirement.
Furthermore, women were more likely than men to rank fear of running out of money among the top three impacts of rising costs, at 48 per cent versus 43 per cent, while pre-retirees were also more likely than retirees to cite the same concern, at 49 per cent compared with 39 per cent.
Mannix said inflation had made retirement spending decisions more difficult for households relying on finite savings.
“Most Australians have felt the pressure of rising costs. Whether it’s paying for essentials like petrol, going out for lunch, or taking a holiday. These higher prices can be felt even more by retirees who now face the reality of living on a set amount of money for the rest of their lives,” she said.
“The dollar value of a lump sum when you retire can seem like a lot of money, but it has to last a long time. It can be hard to know how much to withdraw, knowing that the purchasing power of $1 million today can halve in 20 years’ time. The impact of inflation can be dramatic, and it is a real concern.
“That’s the power of a guaranteed regular income. A ‘paycheck’ means retirees know their needs are taken care of giving them greater confidence to spend on their activities and hobbies that give them purpose and happiness in retirement,” Mannix added.
The research also suggested retirees believe they need materially more income than current industry benchmarks imply.
On average, respondents said a person aged 65 or over needed $70,398 a year, or about $1,350 a week, to live comfortably and happily in retirement. That compared with the ASFA Retirement Standard’s $54,840 a year, or $1,055 a week, for a comfortable lifestyle for a single person.
Challenger said the results highlighted a broader need for better retirement guidance, with 30 per cent of respondents saying they would be happier with greater financial education.
