Retirement confidence lowest in a decade: Report

Just over a quarter of pre-retirees (28%) feel prepared approaching retirement, which has sunk to its lowest point in a decade as those with lower super balances take the biggest hit, an annual report highlighted.

According to the Brighter Super and Investment Trends 2026 Retirement Income Report, the share of retirees living comfortably has plunged to 38% from 58% in a year, with three in four blaming the cost of living.

Retirees' confidence in having enough money to fund retirement also fell from 60% to 41% over the year, and among retirees, those struggling to make ends meet more than tripled, from 4% to 13%. Additionally, the share of those extremely concerned about outliving their savings tripled from 6% to 18%.

The number of retirees just covering the basics or struggling more than doubled, from 14% to 30%. Almost three-quarters (72%) named inflation and the cost of living among the biggest influences on their financial position.

Observing the lack of confidence, more than half of pre-retirees (54%) expect a retirement income shortfall, with the move to cut spending now becoming the most common plan moving forward (49%, up from 21%).

However, the report identified those seeking financial advice are more likely to make additional contributions to their super, with advised pre-retirees more than twice as likely to be contributing more to super as those not open to advice (37% versus 15%).

Among pre-retirees, only 12% of those with less than $100,000 in super felt ready for retirement, compared with 75% of those with more than $750,000.

Contributing more to super was retirees' most common response when asked what they would have done differently, cited by more than 30%, the report found.

Brighter Super chief executive Kate Farrar explained how higher super balances have become a factor to boost confidence.

"While confidence is down among both pre-retirees and retirees, this research shows people with higher super balances feel more prepared, comfortable and confident about retirement, and super funds have a real role to play in helping members get there," Farrar said.

"Advice is a big part of that. People who get advice are more than twice as likely to be putting extra into their super, and the earlier they start, the more time it has to grow."

Investment Trends head of research Julian Cappe added: "After 17 years of tracking how Australians approach retirement, this year's results show financial pressure reaching people at every stage, from those still working to those already retired."

"When people expect to fall short, they are now more likely to plan to spend less than to save more."

The survey also found those who began planning retirement before the age of 40 were fare more likely to be living comfortably (64%) than those who had not actively planned (17%).

Advised retirees were more likely to live comfortably than those not open to advice (57% versus 31%), though financial circumstances also play a part. Among recent retirees, 61% of those who took advice felt they were prepared before retiring, compared with 32% of those not open to advice.

Yet 55% of all retirees said they received no guidance before retiring.

"With retirement preparedness, comfort and confidence falling, the findings from the research reinforce the value of advice in helping Australians understand their options, close income gaps and make confident choices for the future," Brighter Super head of product and retirement Critina Saija said.