Australians aged 60 and over are reporting slightly higher levels of retirement satisfaction, but concerns around cost of living and financial security continue to influence confidence, according to new research from Challenger.
The third annual Challenger Retirement Happiness Index, produced in partnership with YouGov, surveyed more than 2,000 Australians and found overall happiness rose modestly to 69.5, up from 68.9 the previous year.
The data suggests lifestyle factors continue to play a central role in retirement wellbeing. Activities and hobbies, a sense of purpose, and physical and mental health were identified as the strongest contributors to happiness, while volunteering, home ownership and relationship status were also associated with higher scores.
At the same time, financial considerations remain a key concern. Having enough money to enjoy retirement was cited as a priority by 44 per cent of respondents, second only to physical health.
The research found retirees are primarily focused on ensuring their savings last, with 72 per cent identifying longevity of income as a key goal. This was followed by the ability to cover health and aged care costs (65 per cent) and maintaining lifestyle (53 per cent).
Challenger chief executive of customer, Mandy Mannix, said the findings highlight the importance of both financial and non-financial factors in retirement outcomes.
“One of the strongest insights is the powerful role purpose plays in retirement happiness. People who volunteer, stay active in their communities, and maintain hobbies and interests consistently report higher levels of happiness,” she said.
Cost-of-living pressures, however, continue to affect confidence. More than half of respondents said rising costs were impacting their lifestyle (57 per cent) and financial security (54 per cent), while 46 per cent expressed concern about running out of money.
Inflation was identified as the most important factor to plan for in later retirement by 67 per cent of respondents, with the impact more pronounced among women and those approaching retirement.
Women were more likely than men to cite the risk of outliving their savings as a key concern, while pre-retirees reported higher levels of anxiety than those already in retirement.
On average, respondents estimated that an annual income of $70,398 was required to live comfortably in retirement, above the benchmark set by the Association of Superannuation Funds of Australia’s Retirement Standard.
Mannix said the transition from accumulation to drawdown remains a challenge for many retirees.
“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,” she said.
The research also pointed to a gap in awareness around retirement income strategies. While 76 per cent of respondents said they would feel more confident with a guaranteed income for life, 59 per cent said they were unfamiliar with lifetime income streams.
A lack of financial understanding was also highlighted, with 30 per cent of respondents indicating they would be more comfortable in retirement with greater financial education.
