Retirement optimism and confidence levels at a 5-year high for Australians
For those interested in financial advice, the top subjects selected were investment advice and retirement planning.
The 2025 edition of State Street Global Advisors’ Global Retirement Reality Report reveals Australians are significantly more optimistic and confident about their retirement this year, with levels reaching a five-year high, despite ongoing global economic uncertainty and geopolitical challenges.
The finding stems from a global annual survey[1] of over 4,300 employees across the US, UK, Ireland, Australia and Canada who participate in defined contribution savings plans, such as superannuation in Australia. The report examines workers’ feelings about retirement, their confidence in achieving their goals, the influences or barriers to retirement, and how these perceptions have changed over time.
Among the 606 Australian respondents in this year’s survey, a third (33%) expressed optimism about being financially prepared for retirement by their planned retirement age, a notable increase from 24% in August 2023 and 22% in May 2020.
Australia ranks as one of the most optimistic countries regarding financial preparedness for retirement, sitting just behind the US at 34%. Canadian and UK respondents reported the lowest optimism levels, both at 20%.
The average expected retirement age for Australian respondents is 66, aligning with the US but later than Canada’s average of 64.
The survey also identified the top three factors positively influencing confidence in retirement for Australians: 43% cited having little or no short-term debt, loans and credit card bills, and 43% expressed confidence that their superannuation or retirement plan is invested wisely. 40% noted their financial ability to save for retirement as positively affecting their retirement confidence.
Jonathan Shead, Head of Investments for Australia at State Street Global Advisors, said: “While this year’s survey presents a hopeful picture, with respondents in Australia and globally generally optimistic about their retirement prospects, the impact of inflation and the broader economic environment remain real concerns over the long term. There are still 28% of Australian respondents expecting to partially retire and continue working, while over 10% cannot envision ever being financially secure enough to afford retirement.”
“Australians identified inflation, increased cost of living, and medical expenses as the top three barriers negatively impacting their retirement confidence. Complex interactions between the public and private systems, concern about health insurance costs in an inflationary environment, and uncertainty about out-of-pocket costs are likely all detracting for retirement confidence for Australians. This highlights the tension between personal financial management and global macroeconomic uncertainty,” he said.
“In response, we are observing that a third of Australians have changed their outlook on retirement in the past six months, and many are adjusting their plans – either by delaying full retirement or embracing partial retirement. Additionally, many Australians plan to increase their short-term savings in the next six months, likely due to the market volatility we are seeing,” Shead added.
Males under 45 with higher income are most optimistic about retirement
Age, gender and income appear to influence confidence levels. 42% of male respondents in Australia are optimistic about being financially prepared for retirement, which is significantly higher than the 24% of female respondents. Women were less likely to have investments outside super (40% vs 53%) and were less likely to have a financial adviser (82% of female respondents do not have an adviser vs 76% of male respondents).
Shead added: “The facts about gender and superannuation have been debated in the public square for years. Median balances for women are lower than men across all age groups. Treasury’s long term microsimulation model of retirement incomes and assets suggests women’s balances will continue to lag behind men’s balances, due to both lower participation rates and the gender earnings gap, although these gaps are expected to reduce in the decades ahead.”
The survey also found that respondents with an income of AUD 100,000 or more are more confident that they will be financially prepared for retirement. Younger workers tend to be more optimistic about their retirement prospects compared to those nearing or already in retirement. While this can be partly attributed to the longer time frame until retirement, it is illuminating that optimism significantly declines at age 45.
More than a quarter of Australians have no plan for retirement savings
Over half of surveyed participants in Australia (53%) associate retirement income with a steady, dependable income stream. However, about one in five (19%) still view it as simply a drawdown plan, indicating confusion about how retirement savings translate into dependable income.
On average, Australians believe they will need just over half of their current income to maintain their desired lifestyle. Over 30% plan to continue investing their savings, drawing down over time. About 20% intend to use their retirement savings to purchase an annuity, and 15% plan to do a combination of both.
Shead added: “It is concerning that more than one in four Australian respondents do not have a plan for their retirement savings once retired. There is also a gender gap, with women less likely to have a plan than men (36% of women versus 18% of men). These findings highlight a clear opportunity for education and tools that will help convert savings into security.”
Financial planning has significant impact on retirement confidence
The survey found that confidence levels among Australian respondents who have an advisor were much higher that other respondents. 64% of advised clients expect to be financially prepared for retirement while only 25% unadvised clients have the same expectations.
For those interested in financial advice, the top subjects selected were investment advice and retirement planning, matching the top priorities in other countries. Debt management was third on the list, with 48% including this as a service of interest – well in excess of any other country in the survey.
“Australians recognise that finances can be complex. And yet, less than 10% of survey respondents have sought financial advice in the past six months. With an aging population and an environment where change and uncertainty remain constant, retirement planning has never been more important. We know that optimism alone will not carry Australians across the finish line. Bridging the confidence gap between aspiration and proper retirement readiness requires collaboration, education, and a renewed focus on evolving superannuation plans. We hope to see more Australians turn their retirement aspirations into reality,” concluded Shead.
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