Will Your Super Last? The Retirement Risk Many Australians Overlook
Retirement Planning Insights
Retirement is not about predicting markets. It is about having confidence in your plan.
If you're approaching retirement, chances are you're not spending much time debating whether active or passive investing is better.
You're probably thinking about questions like:
Will we have enough?
Can I stop work when I want to?
Will our money last?
What happens if markets fall just before I retire?
They're important questions.
Research commissioned by ASIC found that nearly half of Australians aged 50 to 66 worry about running out of money in retirement, yet only a minority have a clear retirement plan in place.
That's hardly surprising.
Retirement isn't just another financial goal.
It's the point where your savings need to start working for you.
For decades, most Australians focus on building wealth. They contribute to superannuation, pay down debt and hopefully watch their savings grow over time.
Then retirement arrives and the focus changes.
Instead of asking, "How do I grow my money?", the question becomes:
"How do I make it last?"
That's where many of the biggest retirement risks begin.
The News Makes Retirement Feel Harder Than Ever
Open almost any news website today and you'll find stories about:
Inflation
Interest rates
Artificial intelligence
Global conflicts
Property prices
Government debt
Recessions and market forecasts
It's enough to make anyone wonder whether they should be doing something different.
Many people approaching retirement feel caught between two opposing fears.
They're worried that markets might fall.
But they're also worried that being too cautious could leave them short of money later in life.
The reality is that no one knows exactly what markets will do next.
There will always be reasons to be optimistic and reasons to be concerned.
That's nothing new.
What often changes is the volume of the headlines.
The challenge for retirees isn't reacting to every headline.
The challenge is making sure their retirement plan can withstand periods of uncertainty whenever they occur.
Because uncertainty isn't an investing problem.
It's a fact of life.
The Real Risk Isn't This Year's Headlines
Markets move in cycles.
There will be periods when investments perform strongly and periods when they don't.
That's normal.
What matters most isn't whether another downturn will occur.
At some point, it almost certainly will.
What matters is whether your retirement plans are prepared when it happens.
Unfortunately, markets don't provide advance notice.
You won't receive a message saying:
"Just letting you know we'll be down 15% next month."
If only it were that simple.
For Australians still working, market downturns are often little more than an unpleasant headline.
For Australians approaching retirement, the timing of those downturns can matter much more.
Why Retirement Changes the Rules
When you're 35 years old, a falling market can be frustrating.
When you're 60 and planning to retire in a few years, it can feel very different.
That's because retirement introduces a risk that doesn't receive nearly as much attention as it deserves.
Investment professionals call it sequencing risk.
The name sounds complicated.
The concept isn't.
Bad timing can matter. A lot.
Research from the Actuaries Institute has highlighted that poor investment returns immediately before or shortly after retirement can have a significant effect on long-term retirement outcomes.
The reason is simple.
Once you're retired, you're no longer just investing.
You're withdrawing money as well.
If a market downturn occurs while you're drawing an income from your investments, you may be forced to sell assets at lower prices to fund your lifestyle.
That can make it harder for your portfolio to recover later.
The order in which returns occur can matter just as much as the returns themselves.
Meet David and Sarah
Let's imagine two people.
David and Sarah are both:
Age 60
Planning to retire at 65
Holding $900,000 in superannuation
Over the next ten years they achieve the same average annual return.
Most people would assume they'll finish in roughly the same position.
But they may not.
David experiences several strong years before retirement and weaker returns later.
Sarah experiences a major downturn shortly before retirement and stronger returns after she finishes work.
Once retirement income payments begin, those different experiences can lead to very different outcomes.
Sarah may need to withdraw funds after markets have fallen, leaving fewer investments available to participate in the eventual recovery.
David, meanwhile, may benefit from stronger growth before he starts drawing income.
Neither investor has done anything wrong.
Neither one made a better decision.
The difference may simply be timing.
That's why successful retirement planning isn't just about achieving strong returns.
It's also about preparing for periods when things don't go according to plan.
Why Retirement Is About More Than Returns
When people talk about investing, the conversation often centres on performance.
Which fund performed best?
Which investment achieved the highest return?
Which strategy has the lowest fees?
Those are reasonable questions.
But as retirement approaches, they aren't always the most important ones.
A better question might be:
"How much risk am I comfortable taking with the money I'll rely on in retirement?"
Many Australians are surprised to learn that their superannuation may already be invested across a broad range of assets.
Depending on the fund and investment option, this can include shares, property, infrastructure, fixed interest and cash.
The reason is straightforward.
Different investments don't always perform well at the same time.
When one area struggles, another may hold up better.
That doesn't remove risk.
No investment strategy can eliminate uncertainty.
But spreading investments across different asset types can reduce reliance on any single investment or market.
For retirees, that's important.
Retirement isn't an investment competition.
It's about creating a strategy that can support your lifestyle through a range of market conditions.
That might mean maintaining the confidence to take a holiday.
Replacing the car when it's needed.
Helping family members when appropriate.
Or simply sleeping well at night knowing your finances are under control.
A good retirement strategy isn't designed to be the best performer every year.
It's designed to help support your goals through both good markets and bad ones.
Because in retirement, confidence matters.
What Most Australians Really Want
Industry research consistently shows that many Australians worry about running out of money in retirement.
Yet when we speak with clients, very few are trying to find the world's best-performing investment.
What they're really looking for is confidence.
Confidence that they can pay the bills.
Confidence that they won't become a financial burden on their family.
Confidence that they'll be able to enjoy the retirement they've spent decades working towards.
Most people don't wake up wondering whether they should own more infrastructure or international shares.
They wonder whether they've done enough.
Whether they can afford to spend a little more.
Whether retirement will be as comfortable as they've hoped.
Those are the conversations that matter.
The Question We Ask Clients
When someone sits down with us a few years before retirement, the conversation rarely starts with:
"Should I choose active or passive investing?"
More often it starts with:
"Am I going to be okay?"
That's a much better question.
Because retirement success isn't determined by whether your portfolio beats a benchmark.
It's determined by whether your money supports the life you want to live.
One of the questions we often ask clients is:
"How would you feel if your super balance fell 20% next year?"
The answer tells us a lot.
Not because we're predicting a market decline.
But because understanding how someone responds to uncertainty is an important part of building an appropriate retirement strategy.
The best investment strategy isn't necessarily the one with the highest projected return.
It's often the one you're most likely to stick with when markets become uncomfortable.
Even the strongest financial plan can be undermined if fear leads to poor decisions during periods of market volatility.
That's why retirement planning should always start with people, not products.
The Bottom Line
As retirement approaches, the goal isn't simply to maximise returns or minimise fees.
The goal is to create a strategy that balances growth, risk, diversification and access to capital in a way that supports your lifestyle and long-term objectives.
That means understanding not only the opportunities available but also the risks that could affect your plans.
Because retirement isn't really about investment performance.
It's about having the freedom to live life on your terms.
Whether that means travelling around Australia, spending more time with the grandkids, helping your family, working part-time by choice or simply enjoying the comfort of knowing the bills are covered, the objective is the same.
To feel confident about the future.
The most successful retirees aren't necessarily those with the largest balances.
They're often the people who understand their plan, trust their strategy and know what their money is there to do.
That's why retirement planning isn't just about growing wealth.
It's about creating the confidence to enjoy it.
And that's a conversation worth having before retirement, not after.
General Advice Warning
This article contains general information only and does not take into account your personal objectives, financial situation or needs. Before acting on any information, consider whether it is appropriate for your circumstances and seek personal financial advice. Past performance is not a reliable indicator of future performance.
References
ASIC, From Anxiety to Action: Helping Australians Plan for Their Financial Future (2026)
https://asic.gov.au/about-asic/news-centre/find-a-media-release/2026-releases/26-074mr-from-anxiety-to-action-helping-australians-to-plan-for-their-financial-futureASIC Moneysmart, Key Research Findings (2026)
https://download.asic.gov.au/media/0ernehhh/26-074mr-moneysmart-key-research-findings.pdfActuaries Institute, Sequencing Risk and Asset Allocation (2025)
https://www.actuaries.asn.au/research-analysis/sequencing-risk-and-asset-allocationAMP, Retirement Confidence Pulse (2026)
https://www.amp.com.au/about-amp/news/2026/september/Retirement-confidence-flatlines-as-fear-of-running-out-grips-three-in-five-AustraliansAustralianSuper, Hostplus and Australian Retirement Trust, published investment performance for Balanced and diversified indexed options for the ten years to 30 June 2026.
ASX, S&P/ASX 200 VIX Index
https://www.asx.com.au/investors/learn-about-our-investment-solutions/indices/types/s-p-asx-200-vix-index