Showcase: A technical advantage

Modelling from the 2026 Intergenerational Report (IGR) released in September predicts that by 2065-66, the number of Australians aged 85 or older will triple to 1.9 million - a huge cohort that will seek retirement advice.

For financial advisers to meet this opportunity, they need to scale their advice offering and have more tools in their kit bag to serve different types of clients.

Thanks to new technology, regulatory reforms and innovative products on the market, they are in the 'sweet spot' of history to do exactly that.

Know members better

Andrew Lowe, head of technical services at Challenger, says the 'Best Practice Principles for Superannuation Retirement Income Solutions', released by the Federal Government in February this year, lay new foundations for existing and prospective advice clients.

For many Australians, superannuation is a large component of their retirement income, and according to the new best-practice principles, they deserve better solutions from their super fund at the product level.

"The principles are specifically calling out that best practice for retirement income is not just an account-based pension," said Lowe.

"But instead, it is the combination of a lifetime income stream beyond the Age Pension; an account-based income stream; and flexible access to sums over a lifetime," he says.

That's a three-pronged wish list that needs the right products and the right technical expertise.

On the latter, Challenger is known to many in the advice industry for having one of the most comprehensive, enduring and forward-facing technical support platforms for retirement advice specialists.

The group's tried-and-tested Challenger Retirement Illustrator, and supporting tools have helped many advisers show clients the benefits of a lifetime income stream strategy.

Separately, advisers are gaining fresh support from the launch of Iress' WealthSolver Retirement Income Solution via Xplan.

"This solution puts in the hands of advisers a tool which they can use within the Xplan environment to not only compare a lifetime income solution but to produce a Statement of Advice within the same environment," says Lowe.

On ways to drive better outcomes

On products, Challenger has built a strong reputation around its lifetime guaranteed annuities (see case study below), but Lowe said that beyond product type, advisers often evaluate four components before delivering a solution to each client.

"I'd suggest starting with how income payments compare, both initially and over time."

"At one end of the spectrum, we've got lifetime payments that are simply fixed ... this gives clients certainty, higher income up front, but it doesn't help protect against the increasing cost of living in retirement," he explained.

"I'll contrast that with something like guaranteed CPI lifetime income payments. We won't know what payments will be in nominal terms in future years, but we do know that the purchasing power of the income payments will be protected."

These days, lifetime income payments can also be linked to different investment markets or options.

"The proposition of an investment-linked lifetime income stream is the certainty that income payments will last for life but with exposure to investment markets and the potential for income growth over timeas well as income volatility."

Then there are the three other considerations, namely: what proportion of the income payments is guaranteed; what costs are associated with the income streams and whether they are explicitly stated; and what withdrawal and/or death benefits are tied to the product.

Confidence in higher balances

It's through planning the best mix of these four components that clients can flex their spending muscle more confidently, not just at the start, but throughout their retirement.

Lowe cites a case study of a 67-year-old client couple who own their home, with $1 million in retirement savings in super and modest assets outside super. In the absence of advice, they might choose to draw the 5% minimum from their super and live on about $50,000 in drawings from their account-based income streams, plus a modest few thousand dollars from the age pension.

With $1 million in retirement savings, the couple might therefore be living on around $55,000 a year and maintaining a relatively modest lifestyle.

By contrast, Lowe said that with some relatively straightforward modelling, the couple could live on $75,000 a year, a higher sum that translates to a better lifestyle.

But here's where the couple can truly benefit from a well-considered plan.

Lowe says that if they were to allocate, say, 30% of their retirement savings to a guaranteed lifetime income stream, such as a guaranteed lifetime annuity, they could potentially be able to:

Increase their total income over life expectancy by more than $180,000 in today's dollars.^

Increase their estate value at life expectancy by more than $130,000 in today's dollars.^

All of that is to say that the couple now have a solution that meets their income and lifetyle goals.

Demand for retirement advice

Australia boasts a world-class retirement system, but there's a nuance to that label that has become more apparent lately.

Global custody giant J.P. Morgan released a report in September stating that Australia has built a world-class accumulation system "but has yet to develop a decumulation system to match".

Because of this, "the underlying problem holding back retiree lifestyles is the confidence-to-spend gap, not the size of balances".

Challenger's Retirement Happiness Index 2026, released in April, points to a similar conclusion. Around 46% of Australians surveyed feared running out of money in retirement as cost-of-living pressures persist, highlighting a disconnect between these concerns and the retirement strategies available to address them.

Financial education and access to professional financial advice can help bridge this confidence gap, with Challenger bringing its solutions and technical knowledge to the table.

"Every day, I speak to advisers who are looking to maximise the outcomes that are important to a particular individual client," says Lowe.

The clock is ticking. Based on government data, around 1.5 million Australians are projected to turn 65 over the next five years, highlighting the growing demand for retirement advice.

"Advisers leveraging technology to provide more advice to more clients is a step in the right direction," he says.

Technology provides the scale, regulatory reforms provide the impetus, and innovative products can drive better outcomes.

And with that, retirement confidence is no longer just a matter of mindset, but the result of a well-laid plan. FS

^Source: Challenger Retirement Illustrator (01/09/2026).  67-year-old male/female client couple.  $500,000 each super. Non-financial assets of $20,000.  $75,000 p.a. desired income.  Amounts shown are in today's dollars. CPI of 2.5% p.a. See Challenger Retirement Illustrator for all assumptions. Reference number: RIC261007000474.

Disclaimer

The information in this document is designed for professional Financial Adviser use only and contains general information only about our financial products. It is not intended to constitute financial product advice. Investors should consider the relevant Target Market Determination (TMD) and Product Disclosure Statement (PDS) and the Statement of Advice prepared by their financial adviser before making an investment decision. Any examples shown in this document are for illustrative purposes only and are not a prediction or guarantee of any particular outcome.

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