Australians’ retirement confidence lifts but uncertainty persists

Australians remain unsure about their ability to retire comfortably despite confidence improving on last year.

A new survey by MFS Investment Management has revealed that most Australians remained uncertain about their ability to retire comfortably, even as confidence levels edged higher compared with 2024.

The 2025 MFS Global Retirement Survey of 700 Australian superannuation members and more than 300 retirees across Australia, Canada, the United States and the United Kingdom found only 39 per cent of Australian members felt “very or extremely confident” they would be able to retire at their desired age.

Among retirees, just 45 per cent were confident their assets would provide sufficient cashflow throughout retirement.

The results align with Super Consumers Australia’s (SCA) new savings benchmarks for current retirees aged 65, which estimates how much Australians need if they own their home and expect to draw on the Age Pension.

For a single retiree seeking a low-cost lifestyle, SCA calculated annual spending of about $32,000 and a required savings balance of roughly $74,000, with the Age Pension covering about 91 per cent of spending.

A medium lifestyle requires annual spending of $44,000 and savings of around $322,000, while a high lifestyle requires $61,000 a year and savings of about $891,000.

For couples, the combined savings targets range from $99,000 for a low-cost lifestyle to $432,000 for a medium lifestyle and $1.216 million for a higher-cost lifestyle.

SCA noted that these levels reflect today’s dollars and factor in the expected Age Pension contribution, which covers between 34 per cent and 92 per cent of retirement spending depending on lifestyle.

Against this backdrop, MFS found that a majority of Australians remained doubtful about their future prospects.

Some 38 per cent of members, up from 28 per cent last year, no longer felt they would be able to retire, while 64 per cent expected to work longer than planned.

Three-quarters of members also acknowledged needing to save more than originally intended, reinforcing the weight of cost-of-living pressures.

Housing costs have overtaken day-to-day living expenses as Australians’ top financial worry, followed closely by inflation’s impact on purchasing power. In response, 33 per cent of members adjusted their retirement investments over the past year, up from 25 per cent in 2024.

Commenting on the results, Josh Barton, senior managing director and head of Australia and New Zealand at MFS Investment Management, said: “While it's natural for financial concerns to prompt adjustments, it's crucial for investors to stay focused on long-term goals.

“Remaining invested over the long term allows members to benefit from compounding returns and ride out market fluctuations, ultimately helping secure a more stable retirement.”

Australians continued to rely heavily on their super funds for retirement planning, with 54 per cent using them as their primary advice source.

Many also consulted financial planners, the financial media, online investment services and family, friends, peers and coworkers.

The survey also highlighted strong enthusiasm for ESG investment options within super funds. Eighty-one per cent of Australians expressed interest, up from 73 per cent in 2024.

Gen Z interest rose sharply from 75 per cent to 97 per cent, Millennials increased from 78 per cent to 90 per cent, and Boomers lifted from 62 per cent to 73 per cent. Gen X saw a slight decline from 71 per cent to 68 per cent.

In closing, Barton said: “It’s encouraging to see conviction improve among members and retirees, yet our study shows that most Australians remain unsure about their journey, and that despite higher mandated and incentivised contributions, cost-of-living pressures continue to weigh heavily on members.”

“Younger generations seeking advice earlier and adopting digital tools is a positive sign for improving retirement confidence and creating a smoother retirement journey, especially as high-quality advice models and digital innovations come together.”