Finally, there’s some good news about super and retirement

At present, retirement income usually comes from two main sources: the pension, which acts as a base income, and an account-based pension from your super, which many people manage conservatively, afraid to spend or take risks in retirement.

This approach has its challenges. Many retirees tiptoe through their savings, afraid of running out of money. Lifetime income streams change that by introducing a third layer – a secure, guaranteed income for life. The best part? You only need to invest a portion of your super to gain this added security.

For years, we’ve been told super is like a conveyor belt: money goes in, grows steadily, and pops out a nice pile of cash when you retire.

Here’s how it works. The pension provides a foundation. A lifetime income stream adds a guaranteed pay cheque, covering essential expenses. The rest of your super stays invested for growth, allowing you to take more risks or boost your lifestyle with confidence.

For some it’s a smarter, more secure way to stretch your retirement savings.

Take Anne, who’s retiring at 67 with $300,000 in super. She’s worried about spending her savings too quickly. She’ll qualify for a full age pension now – almost $30,000 for a single person; and on top she will have two income layers: a lifetime income stream that she allocated a portion of her super to at age 60, and an account-based pension.

At 67, the $100,000 of lifetime income stream secures an income every year of about $7500 unconditionally for the rest of her life. The rest of her super could stay invested in growth assets, affording the flexibility to take on riskier investments and achieve more upside over the long term without the constant fear of running out of money to live on.

But here’s the kicker: it’s not really just about products in the market changing. These products, if implemented well, are about building confidence, helping retirees feel secure enough to actually spend the money they’ve got growing in super on living a better life.

The big news this week is that the government’s reforms are focused on making these products easier to understand, safer to use and directly available through your super fund – no longer tucked away behind confusing jargon or exclusive to financial advisers.

If super funds get this right, lifetime income streams could transform how Australians approach retirement over the next 10 years.

2. Retirement planning will finally get some attention

For most Australians in midlife, questions about retirement start piling up: What are my goals? Have I saved enough? Will my super last? How much can I afford to spend? What happens if my health takes a turn?

These aren’t simple, automated decisions like super contributions during your working years. They’re messy, personal and – let’s face it – stressful.

For years, we’ve been sold the idea that superannuation is akin to a conveyor belt: money goes in, grows steadily and pops out a nice pile of cash when you retire. But anyone who’s tried to navigate modern retirement knows that’s far from reality. Almost every step is clunky, complex and overwhelming.

You’ve got to figure out how much you’ll need, how long your money will last, and what trade-offs to make, all without much support. Financial literacy gaps and the high cost of advice often leave ordinary Australians to fend for themselves. And with too few financial planners to go around, the “just get advice” mantra doesn’t solve the problem for everyone.

This week, however, I saw a shift. The superannuation and financial advice industries are finally starting to acknowledge that retirement isn’t just about money – it’s about navigating life’s biggest transitions. It’s about understanding your options and making decisions that work for your personal circumstances.

Thankfully, the government and some big super funds are stepping up. The government has committed to upgrading the MoneySmart website, our only independent, government-provided resource for tackling the complexities of retirement. The promise? Better calculators, practical projection tools, and clearer information on how super and the pension work together.

Meanwhile, super funds are focusing on their own tools, encouraging members to use calculators that can boost confidence and improve drawdown strategies. In fact, they’ve found that people who take the time to learn about retirement – whether through government tools or fund-provided resources – are often better equipped to make informed, empowered decisions.

For many, these tools will provide the actionable information needed to handle less complex decisions, even before seeking professional advice (if it’s needed at all).

But here’s the catch: while the commitment to better tools is promising, an upgraded MoneySmart website isn’t expected until 2027, which is too late for more than 450,000 retirees who will have transitioned by then. Here’s hoping it delivers when it arrives.

For the first time, though, it feels like the system is starting to meet people where they are: acknowledging that retirement is deeply personal and often overwhelming. That shift alone is worth celebrating.

3. Retirement has to be a system that evolves as retirees do

Retirement today is vastly different from what it will look like a decade from now. People retiring today have had super contributions at only 9 per cent or higher for part of their working lives, leaving them with modest balances averaging about $250,000.

But in 10 years’ time, retirees will have had 9 per cent or more for their entire careers, resulting in average balances exceeding $500,000 – and lifestyle expectations to match.

This shift will redefine retirement as we know it. At present, retirees control about $2.4 billion of Australia’s GDP. A decade from now, that figure will skyrocket, fundamentally reshaping the way we think about retirement and its impact on the broader economy.

We’re about to witness a significant transformation – and the system needs to evolve to meet the needs of both today’s retirees who will need to rely on the age pension, and those in the future who will rely on superannuation – and people will need a different mix of products to secure their income.

With larger balances to manage, the system is being reshaped to offer better tools and tailored products that cater to more complex financial needs.

I’m impressed. The reforms we saw this week are all about fixing the everyday frustrations that come with planning and living your retirement:

• Tools that make complex decisions simpler.
• Products that give you financial security and peace of mind.
• A system designed to support everyone, not just those with millions of dollars in super.

While some of the changes won’t arrive until 2027, the shift in focus is happening now. For the first time, it feels like the superannuation industry is listening to what people really need – and that’s a big deal.

Bec Wilson is the author of bestseller How to Have an Epic Retirement. She writes a weekly newsletter at epicretirement.net and is host of the Prime Time podcast.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.

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