After decades of earning, saving and investing, retirement presents an entirely different challenge. For much of our working lives, the focus is on accumulation: building wealth, growing superannuation and making sensible financial decisions that create future opportunities. Retirement turns that thinking on its head.
The question is no longer how to build wealth. Instead, it becomes how to convert a lifetime of savings into a sustainable source of income that can support the life you want to live, no matter what happens in markets, the economy or your personal circumstances.
It is a common theme we hear from clients. Rarely is the concern whether they have accumulated enough wealth. More often, it is whether they can afford to enjoy it. Whether it is travelling, helping family, renovating the home or pursuing long-held goals, many retirees find themselves asking the same fundamental question:
Will my money last?
The answer depends less on investment returns than many people expect and more on understanding two risks that sit at the centre of retirement planning: longevity risk and sequencing risk.
Retirement may last longer than you think
One of the great successes of modern Australia is that we are living longer than previous generations. Advances in healthcare, medical treatment and living standards mean many Australians can now expect retirement to span two or even three decades.
The challenge is that many people still plan around average life expectancy. Yet retirement planning is not about averages. For couples in particular, the question is how long at least one partner may require financial support, which can extend the planning horizon well into later life.
At the same time, the financial resources needed to support a comfortable retirement continue to rise. Updated figures from the 2026 ASFA Retirement Standard show that the lump sum required to fund a comfortable retirement has reached record highs, increasing to approximately $630,000 for a single homeowner and $730,000 for a couple, assuming some Age Pension support. ASFA attributes much of this increase to rising living costs and the growing reliance on personal savings to maintain retirement lifestyles.
The reality is that many of the expenses retirees face, including utilities, healthcare, insurance, council rates and travel, have increased significantly in recent years. While the Age Pension remains an important component of Australia’s retirement system, ASFA has noted that retirees are increasingly relying on their own superannuation savings to maintain the lifestyle they had envisaged.
The picture is not entirely one-sided. Australians are generally entering retirement with larger superannuation balances than previous generations. Strong investment returns in recent years and the gradual increase of the Superannuation Guarantee to 12 per cent have certainly contributed[i]. There is also evidence that Australians are becoming increasingly engaged with their retirement planning, with ASFA reporting that member contributions increased by 19.2 per cent in the year to December 2025. This may reflect a growing focus on building long-term retirement savings and making the most of available superannuation opportunities[ii].
For many people, the conversation is no longer simply about how much they have accumulated, but how those assets can be structured to provide sustainable income, flexibility and confidence throughout retirement.
Perhaps the more important takeaway is not the number itself, but what it represents. Retirement is no longer a short period at the end of life. For many Australians, it may be a thirty-year chapter requiring a carefully managed balance between spending today and preserving flexibility for the future.
This is where thoughtful planning can add value. Retirement is no longer just about reaching a particular number. It is about creating a strategy that can support your lifestyle across what may be a retirement lasting thirty years or more.
Why timing can matter as much as returns
As important as longevity risk is, it is only part of the story.
Many Australians assume that the success of their retirement will largely depend on investment returns. While returns are certainly important, retirement outcomes can also be shaped by something far less obvious: when those returns occur.
This concept is known as sequencing risk and describes the impact that the order of investment returns can have once you begin drawing an income from your portfolio. A retiree who experiences a significant market downturn in the first few years of retirement may face a very different outcome to someone who encounters the same downturn much later, even if their long-term investment returns ultimately prove similar.
Consider Paul and Karen*, who retire at age 67 with approximately $850,000 in superannuation and their home paid off. Their spending goals broadly align with a comfortable retirement lifestyle, and like many retirees, their initial focus is on investment performance.
However, if one of them lives into their nineties, their retirement could span almost three decades and include multiple market cycles, changing legislation, evolving family priorities and potentially higher healthcare costs. Now imagine a significant market downturn occurs in the first few years of retirement. Rather than simply waiting for markets to recover, they may need to continue drawing income at the same time their investments have fallen in value, reducing the capital available to benefit from any future recovery.
This is one reason retirement planning looks different from investment planning. The objective is not simply to pursue higher returns. It is to create a structure that may help support your lifestyle through periods of uncertainty, without placing unnecessary pressure on your long-term financial security.
A well-designed retirement strategy may incorporate liquidity reserves, diversified investments, appropriate levels of growth exposure and sustainable withdrawal rates. It may also consider the role the Age Pension can play as a source of indexed lifetime income as circumstances evolve over time.
The goal is not to predict market movements or future events. It is to build enough flexibility that when uncertainty inevitably arises, your retirement strategy remains aligned with your longer-term objectives.
Planning for confidence, not certainty
For many Australians, the greatest threat to retirement is not a single market downturn or a particular investment decision. It is underestimating how long retirement may last and failing to appreciate how vulnerable a portfolio can be to poorly timed market events in the early years.
Longevity risk and sequencing risk receive far less attention than investment returns, yet they play a significant role in shaping retirement outcomes. Understanding them is often the difference between a retirement spent worrying about money and one spent enjoying the opportunities that money was intended to create.
Markets will fluctuate, headlines will come and go, and uncertainty will always be part of investing. Retirees who navigate retirement successfully are rarely those who predict every market movement correctly. More often, they are the people who enter retirement with a clear strategy, realistic expectations and the confidence to stay focused on their long-term goals when short-term challenges inevitably arise.
Retirement planning is often viewed as a financial exercise, but at its heart it is about creating options. It is about having the confidence to take the holiday, support family, pursue long-held goals and enjoy the freedom that years of hard work have helped create.
At Stratus, we help clients test their retirement plans against a range of scenarios, explore sustainable income strategies and build frameworks designed to adapt as life changes. Because the objective is not simply to preserve wealth. It is to create the confidence to use it for the life you want to live.
If you would like to discuss your long-term retirement goals, contact your financial adviser Brett Cribb, Steve Nicholas, and James Marshall at +61 (0)7 3007 2007, or email info@stratusfinancialgroup.com.au.
Stratus Financial Group helps individuals, families, and retirees manage their complex financial affairs and coordinate their professional advisers.
Stratus Financial Group and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This is general advice only and does not take into account your objectives, financial situation, or needs, so you should consider whether the advice is relevant to your circumstances. Always read the relevant Product Disclosure Statements (PDS) before making any financial decisions.
[i] ASFA Retirement Standard: Super balances needed for comfortable retirement reach all-time high – ASFA
[ii] Super Statistics – ASFA
* Paul and Karen are hypothetical examples only and are provided for illustrative purposes. This example does not constitute personal financial advice.