A third of Australians approaching retirement have taken no action to prepare for life after work, despite most reporting they are engaged with their finances, according to new research from TAL.
The second edition of TAL’s What I Wish I Knew About Retirement surveyed 2,000 Australians aged 55 and over and found 31 per cent of pre-retirees had not taken any steps to prepare for retirement, while 21 per cent did not know what they planned to do with their super.
The findings come as retirees and those nearing retirement place increasing importance on financial certainty.
Two-thirds of pre-retirees ranked both an income that lasts a lifetime and income that keeps pace with inflation among the most important features of a retirement product.
Shaun Bransdon, general manager, retirement and wealth at TAL, said the research highlighted a disconnect between financial engagement and retirement planning.
“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.”
Trust in super funds remains strong, with 64 per cent of pre-retirees saying they trust their fund to advise on retirement needs and 82 per cent seeking guidance in at least one area.
“Super funds are stepping into this opportunity, building on the trust developed with members over their working lives: 64 per cent of pre-retirees say they trust their fund to advise on retirement needs,” Bransdon said.
“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.”
Cost-of-living pressures also appeared to be influencing retirement expectations with just 29 per cent of pre-retirees said they had money left over for regular saving or investing, while almost half expected to have less spending power in retirement.
The proportion expecting to work beyond age 70 increased to 36 per cent from 27 per cent in 2024.
While only 15 per cent of pre-retirees expected to retire before age 65, 61 per cent of current retirees had already left the workforce before reaching that age.
Nearly half of retirees surveyed had taken no meaningful action to prepare for retirement, up from 39 per cent in 2024.
“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,” Bransdon added.
Additionally, the study found retirement satisfaction varied depending on how retirees used their super.
Around 90 per cent of retirees who chose pension accounts or lifetime income products said they were satisfied with their decision, compared with 81 per cent who left their super in accumulation and 66 per cent who withdrew lump sums.
However, awareness of retirement income products remained relatively low with only 38 per cent of pre-retirees said they were familiar with lifetime income products, although 87 per cent indicated they would like to learn more if their fund offered one.
Among current retirees, 66 per cent said they would have been interested if such products had been clearly available when they retired.
“Retirement income strategies work best when flexibility is combined with certainty. And our research shows this is increasingly important to people,” Bransdon said. “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.”
The research also found one in five retirees now in their 80s wished they had spent more in the early years of retirement. If they began running out of money, 40 per cent said they would reduce spending, while 34 per cent would rely on the Age Pension.
“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.”
