Research reveals Australians happy in retirement but pre-retiree confidence is waning

Mandy Mannix

Australians are living a happy retirement, but for those approaching retirement the picture is less certain. New data from the Challenger Retirement Happiness Index, released yesterday, shows preretirees are feeling more anxious about their financial future, with confidence taking a hit over the past year.

The second annual Challenger Retirement Happiness Index, developed in partnership with independent research provider, YouGov, surveyed 1633 Australians aged over 60 to track factors driving retirement happiness. While overall happiness remains strong, pre-retirees are feeling the squeeze, with rising living costs and a lack of financial certainty clouding their outlook.

Those in retirement reported higher scores of happiness (70) compared to pre-retirees (66), but cost-ofliving pressures are impacting confidence across the board. Three in four pre-retirees (76%) and 72% of all Australians 60+ saying rising cost of living has affected their financial security, with a third (34%) noting a significant impact.

While the overarching Index score edged down slightly to 69 (down from 70 in 2024) the key drivers of retirement happiness remained unchanged including activities (80), mental health and wellbeing (75), and a sense of purpose (72).

Commenting on this year’s findings, Challenger Chief Executive, Customer, Mandy Mannix, said: “Ask a happy retiree what brings them joy, and they won’t just talk about their super balance. They’ll talk about the coffee catchups, the morning walks, and the holidays they have planned to visit family or see the world. The little things make a big difference – which is why activities and purpose are so important.”

“When we asked Australians over 60 what made them happy, three things stood out: good physical health (59%), enough money to enjoy life (41%), and good mental health (38%),” Ms Mannix added.

Concerns shake confidence

Women and unadvised Australians are facing the highest barriers to a confident retirement. A third of women over 60 (34%) are extremely or very worried about outliving their savings compared to 20% of men. Unadvised Australians are twice as likely to be extremely or very worried about outliving retirement savings (35% compared to 19%).

“We know retirement can be one of the most rewarding stages of life—but confidence is key,” Ms Mannix said. “When people feel uncertain about their finances, they tend to hold back. That’s led to a chronic underspending problem in retirement, with many Australians living more cautiously than they need to.

“Retirees go from a steady pay cheque to a lump sum, and that sudden shift makes it hard to budget with confidence. That’s why a guaranteed, regular income for life is so powerful—it replaces that pay cheque, can keep up with inflation, and gives retirees the freedom to actually live their best life in retirement.”

Education key to empowering retirees

The research revealed that better guidance and simple education could be key to helping Australians feel confident enough to spend and enjoy their retirement – without the fear of running out.

Three in four (74%) Australians aged 60+ believe better financial education would improve their happiness, but half (51%) say they don’t have the resources to plan for retirement. One in five – around 1.2 million retirees – don’t know where to start.

The Challenger Retirement Happiness Index findings align with recent UNSW research, which revealed 57% of people don’t even know that lifetime income solutions exist, despite their ability to significantly improve confidence to spend in retirement.

With nine in ten unadvised (those who have never received financial advice) Australians wanting free, basic retirement education, there is a significant opportunity to improve financial literacy and help retirees feel more secure about their future. With the right education and income strategy, retirees could enjoy more freedom and financial security.

“Retirement confidence isn’t just peace of mind—it’s quality of life. When people feel financially secure, they spend, plan, and live without that worry. That’s why guaranteed regular income matters, and why Challenger is committed to helping retirees feel secure for a better future,” Ms Mannix said.

Read the report.