Darren Connolly
For three decades, Australia’s wealth industry has been built around one goal: growing portfolio values. Now the baby boomers, who drove much of the country’s rising wealth, are asking themselves a very different question: how do I spend it without running out?
The challenge is widespread. The number of Australians retiring each year is set to double from around 150,000 to 300,000[1] over the next decade, carrying close to $1.5 trillion in super with them. Treasury projects the number of Australians over Age Pension age will almost double to around 9 million by 2066[2].
InvestmentMarkets CEO Darren Connolly said the resulting shift from saving to spending is one of the biggest changes the Australian investment industry has faced.
‘We’ve spent a generation encouraging Australians to accumulate wealth. Very little of that conversation prepared people for the day the pay cheque stops, and the portfolio has to generate the income they need,’ Mr Connolly said.
‘Building wealth and drawing it down require different strategies and have different issues to consider. During the accumulation phase, a bad year is a buying opportunity. In retirement, a bad year early on can permanently impact what you have to live on for the next 20.’
Policy is catching up
Canberra has been guiding the industry in the same direction. In February, the Government released its Best Practice Principles for retirement income solutions and the Retirement Reporting Framework[3], aiming to give the retirement phase as much policy and product focus as accumulation. The reporting framework, which will make fund retirement outcomes more transparent, commences from 2027[4].
Mr Connolly said the reforms were welcome, but many retirees, particularly self-directed and SMSF investors, are not waiting for product providers to come up with solutions.
‘Self-directed retirees are taking this into their own hands. They’re looking for three things: reliable income, protection against market falls, and a provider they can trust. That’s a different shopping list to a 40-year-old chasing growth.’
InvestmentMarkets data shows the shift is already showing up in investors’ behaviour with a steady and consistent growth in investor research and investigation in income-focused opportunities. Interest in income asset classes has risen 15X% from the start of 2025 through to the end of September 2026.
‘Older investors aren’t asking: what will give me the highest return? They’re asking: what will pay me every month, and what happens if markets fall? That’s sequencing risk and it’s the single biggest threat most retirees have never heard of,’ Mr Connolly said.
Mr Connolly said the decumulation story is the flip side of the Great Wealth Transfer.
‘Most of the commentary on the wealth transfer has been about the kids who’ll inherit the assets. But before the dollars are passed down, the generation that built all that wealth still needs to fund 20 or 30 years of hopefully living their best lives, and potentially helping family along the way,’ he said.
‘Our message to retirees is simple: your strategy has to change. Compare your options, understand the risks, particularly sequencing risk, and get advice where you need it. The product shelf for retirees has never been broader but the questions you need to ask are very different to before.’
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