Tim Helyar

State Street has released the first module of Reimagining Retirement^[1], a comprehensive research series examining how macro forces are transforming retirement systems worldwide and where financial services can respond with scalable solutions.

Drawing on analysis of 15 countries across North America, Europe, Asia-Pacific, Latin America, and the Middle East, the research identifies five critical forces reshaping retirement: demographic aging, socioeconomic shifts (including the rise of gig work), technological disruption, rising longevity, and mounting fiscal pressures. The report reveals that despite vastly different system designs, every country faces challenges balancing fiscal sustainability with retirement adequacy, and most are converging toward portable defined contribution models and flexible decumulation.

Australia’s retirement system is a multi-pillar model, balancing adequacy, sustainability and broad coverage. It is often cited as a benchmark among Anglo-American countries for its integration of public and private provision, and its adaptability to changing economic conditions.

“Australia’s retirement industry has become a A$4.33 trillion super system, placing the system on par with the combined balance sheets of major banks,” said Tim Helyar, country head for Australia at State Street. “It is more than an ‘individual’ concern but a system that influences the wider economy, capital markets and national financial stability. The scale also creates significant opportunity for the financial services industry.

“With annual contributions near A$160 billion and withdrawals around A$120 billion, Australia is approaching the inflection point where decumulation or retirement overtakes accumulation.”

“Decumulation has moved to the centre of the retirement agenda,” said Jonathan Shead, Head of Investments in Australia at State Street Investment Management. “The question is no longer how much Australians have saved, but how reliably those balances can be translated into income for life. Australia is a gold standard, poised to build one of the best retirement systems in the world. We believe as an industry, have both the opportunity and the responsibility in standardising a simple default pathway, combining guided drawdown with risk pooling and partial annuitisation or deferred income components.

“Giving Australians predictable income, flexibility when circumstances change, and clear guardrails that reduce the risk of poor sequencing or longevity outcomes are critical.”

Helyar added: “Super funds’ rising private markets allocations and data-driven decisioning are unlocking performance and personalisation opportunities. Millennials and Gen Z are intensifying digital engagement with superannuation, driving investment in mobile first platforms, personalization, and fintech partnerships that capture attention and flows.”

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Notes:
[1] https://www.statestreet.com/au/en/discover/reimagining-retirement/shifting-global-landscape

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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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Notes:
[1] The study, conducted by YouGov between March 20 and April 7, 2025, surveyed 4,371 respondents aged 18+, who are employed full time or part time, and participate in an employer-sponsored savings plan.

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As the creator of the world’s first ETFs^[1], State Street Global Advisors is committed to making investment opportunities more accessible with institutional- quality investments at a competitive price. State Street Global Advisors is the third largest global ETF provider^[2] with approximately US$1.5 trillion in total ETF assets globally^[3], with 17 ETFs available on the Australian Securities Exchange (ASX).

The SPDR^® S&P^®/ASX 200 Fund (STW) was upgraded to a “Highly Recommended” rating by Lonsec, noted strong conviction in the fund’s cost-effective passive exposure to the broader Australian equity market. Lonsec also highlighted the fund’s significant scale at $4.88 billion and high liquidity, along with its long-term record of tracking its underlying index.

The SPDR^® S&P^®/ASX 50 Fund (SFY) was upgraded to a “Recommended” rating due to its competitive fee of 0.2% per annum. This ETF offers investors a cost-effective and liquid means to gain index exposure to the 50 largest stocks by market capitalisation on the ASX.

The SPDR^® S&P^®/ASX 200 Listed Property Fund (SLF) was upgraded to a “Recommended” rating, also due to its fee reduction from 0.4% to 0.16% per annum in July 2024, resulting in its annual fees and cost being the lowest in its peer group, offering an efficient means of passive exposure to listed Australian property securities.

Lonsec assigned a “Recommend” rating to State Street Gold Fund, which was launched in July 2024. Lonsec said that the Fund offers a cost-effective means of gaining exposure to gold prices without requiring investors to hold, trade, or store physical gold bullion. Another strength of the Fund is that its annual fees and cost is priced favourably against its peer group.

State Street Global Advisors Head of Intermediary Business for Australia Tim Bradbury says: “We are pleased to receive such recognition of our funds from Lonsec. Furthermore it is exciting to see increasing numbers of Australian financial advisers using low-cost ETFs as key building blocks in their client portfolios – in line with advisers in other markets around the globe.”

State Street Global Advisors Head of Investments for Australia Jonathan Shead says: “The recognition is a mark of confidence in the capability and track record of our local ETF team. Our Australian-based portfolio managers also leverage the expertise and knowledge of over 70 investment professionals across the globe, with an average of 21 years of experience.”

Investment in Australian exchange traded products (ETPs) surged in 2024 to reach $225 billion in Funds Under Management, representing a nearly 4-fold increase in market size over the last five years^[4].

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Footnotes:
[1] ETFs managed by State Street Global Advisors have the oldest inception dates within the US, Hong Kong, Australia, and Singapore. State Street Global Advisors launched the first ETF in the US on January 22, 1993; launched the first ETF in Hong Kong on November 11, 1999; launched the first ETF in Australia on August 24, 2001; and launched the first ETF in Singapore on April 11, 2002.
[2] Source: Source: Pensions & Investments Research Center, as of December 31, 2023. Updated annually.
[3] Source: Morningstar Direct as of 30 September 2024
[4] Source: ASX, as of October 31, 2024

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Anna Paglia

State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), today released the results of its 2024 ETF Impact Survey, which found that despite the domestic cost-of-living crisis, Australians are amongst the most optimistic in the world regarding their own financial position.

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SPDR® S&P®/ ASX 200 ESG Fund (Ticker: E200)

SPDR’s ESG ETF — E200 — listed on the ASX on 5 August 2020, has received its first rating from Lonsec. It provides a similar risk and return profile to the S&P/ ASX 200 Index with enhanced ESG features. Its ESG characteristics are achieved through exclusionary screening and best-in-class rankings.

Lonsec said State Street Global Advisors was a leading global manager in the global ETF market, with scale and resources to effectively manage and structure ETFs.

“This Australian equities fund invests in large capitalization stocks that have recognizable ESG characteristics, replicating the performance of a responsible investing aware index,” they said.

“The ETF’s Managed Expense Ratio (MER) is much lower compared to similar ESG ETFs on the ASX and the index’s underlying screening process is effective with clear criteria.”

E200 provides low-cost exposure to the S&P/ASX 200 Index, with a focus on companies with strong ESG characteristics, while also removing companies interacting with tobacco and controversial weapons, companies that generate 5% or more of their revenue from thermal coal and companies with low UN Global Compact (UNGC) scores. In addition, those with S&P DJI ESG Scores in the bottom 25% of companies within their industry groups are excluded.

State Street Climate ESG International Equity Fund

The State Street Climate ESG International Equity Fund (the Fund) also received a ‘Recommended Index’ rating.

Lonsec welcomed State Street Global Advisors’ mitigation and adaption approach to integrating climate objectives into portfolio construction while also leveraging a best-in-class ESG data platform.

“The Fund has been designed to align with global climate goals stipulated in the Paris Accord and the RCP 2.6 climate scenario developed by the Intergovernmental Panel on Climate Change,” they said.

“This has been done while seeking to provide investors with a broad-based global equity performance return profile and with an attractive MER.”

It has been designed to meet specific climate related objectives and ESG themes, while providing a broad-based exposure to global equity markets. It aims to achieve capital growth and income in line with the MSCI World ex-Australian Index while delivering on climate and ESG objectives. The Fund allocates higher weightings to companies with better overall ESG profiles determined by State Street Global Advisors’ ESG scoring system, R-Factor.

State Street Global Advisors Head of Investments Australia Jonathan Shead said the funds had received significant interest from investors.

“We’ve leveraged our global insights and access to leading data providers to bring funds to Australian investors that may better align with their values, that help manage the financial risks of climate change and poor ESG practices, that are widely diversified and that are relatively low-cost,” he said.

“These funds provide access to equities with clearly labelled and defined ESG characteristics without a price premium.”

Following this review, State Street Global Advisors now has more than 12 ETFs and four managed funds with ‘Recommended’ or ‘Highly Recommended’ ratings from Lonsec.

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Lindsay Garnock

Financial advisors are engaged in a battle on behalf of their clients. It is a battle to generate enough income for a comfortable retirement.

That might seem strange given cost of living increases have been subdued over the last decade however, the collapse in the interest available on bank accounts or other “safe” investments, combined with cost increases in key areas like health and utilities, have forced advisors to look for other solutions for stable and sustainable income.

With the current economic environment characterised by low inflation, low growth and low interest rates, investors are looking to better diversify their income streams. For advisors this new reality presents both challenges and opportunities. As their clients look to build retirement income streams, advisors are moving away from low yielding cash and fixed income investments and this has significant consequences for risk management. But the move isn’t only away from defensive assets.

The past 12 months haven’t been so positive for some of Australia’s high income yielding stocks with the local market’s heavy reliance on resources and banks never been more apparent. As a result, the attitude of investors towards global equities has changed over the past 2-3 years as the breadth of opportunities for building income streams from offshore investments is realised.

Advisors are having to educate their clients about the benefits of supplementing their current income stream with global equities. This includes sectors that aren’t broadly available in Australia such as healthcare, utilities and staples. Exchange traded funds (ETFs) that follow income “rules” are one method advisors have been using to access these income opportunities offshore.

These rules are designed to increase portfolio yield while avoiding some common dividend traps. For example, the rules for the SPDR’s S&P Global Dividend Fund (WDIV) require each company to have had stable or consistent dividends over a ten year period. At the same time, stocks that have a yield above 10% are excluded – extreme yields at this level usually occur because of a sudden price collapse rather than strong profits or dividends.

Advisors are still seeing a home bias to local equities due to franking credits but there is definitely a place for global equities in an income portfolio. A global equity portfolio, such as the WDIV ETF, is able to generate surprisingly high yields without resorting to concentrated stock weights. Recent equity yields 5% pa have been achieved while holding 100 stocks – a significant boost on more traditional global equity portfolio yields of 2-3%.

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Commentary from a recent webinar ‘The Search for Income: Time for a New Approach’ held by State Street Global Advisors moderated by Michael Furey, Managing Director of Delta Research & Advisory, with guest presenter Lindsay Garnock, Director and Senior Financial Advisor with Boyce Financial Services alongside Jonathan Shead, Head of Portfolio Strategists, State Street Global Advisors Asia Pacific.

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