The average super fund member now believes they need more than $1 million to retire comfortably, the first time the figure has passed the million-dollar milestone since CoreData Research and Conexus Financial* jointly began the Best Possible Retirement (BPR) study, now in its third year.

It is up from $892,247 last year, and the gap between what pre-retirees think they will need and what retirees say they actually needed has narrowed to just $63,000. A year ago the figure was almost $140,000.

Alana Devitt, research consultant at CoreData, says the usual pattern in the BPR research shows pre-retirees overestimating their needs out of anxiety, then relaxing somewhat once they are actually retired and find their costs are lower than feared. 

This year the pattern has been broken and retirees, not pre-retirees, are now the ones under the most pressure. The research no longer supports the idea that retirement gets easier once you are in it – in fact, there are indications in the BPR figures that it gets worse.

“Typically, what we find with the BPR results is that there’s always this really large gap between the pre-retirees and the retirees,” Devitt says.

“The story has always been that, yes, there’s that anxiety as you lead up to retirement. Maybe that anxiety plays out in that you think you need more than you do, but once you’re in retirement, you get into the flow of it. You realise you don’t need as much money as you initially thought – your home, your bills are a bit cheaper. But that’s just not the case anymore, and the data is really showing that.”

Only 62 per cent of retirees say their super fund met their retirement expectations this year, down from a figure that had been steady at 74 per cent for the previous two years and was 76 per cent in 2023.

Sharpest single-year fall

It is the sharpest single-year fall the research has recorded and the disappointment is starting to affect even those members well into retirement. The percentage of retirees 16 years or more into retirement who say their expectations weren’t met jumped from 14 per cent to 34 per cent in a single year.

“This is the first year we’ve had such a dive in retirees saying that their super fund did not meet their expectations when they retired, and it’s actually largely driven by the members who are more than five years into retirement,” Devitt says. 

“This cohort who missed that window of service that the funds are providing for their pre-retirees now, in terms of tools and calculators and financial advice, are now essentially in retirement past five years and struggling to see how they’re going to make their money last their whole retirement.”

Among members zero to five years into retirement, whose fund fell short, the top area for improvement, cited by 30 per cent, is a better understanding of how long their super will last across different withdrawal strategies.

For members six or more years in, that complaint drops to 24 per cent but is overtaken by a much more fundamental problem: 26 per cent of the cohort say they need more awareness of the products and services their own fund already offers. 

Clearer comparisons between staying with the fund and switching to another provider, and more personalised communication tailored to their retirement plans, both sit at 20 per cent for this group.

When a fund stops engaging

Devitt says the shift from a withdrawal-strategy problem to an awareness problem is what happens when a fund stops engaging a member once the initial retirement transition is over. 

“What the funds need to do is go back and re-service those [long-retired] members, because now they’re struggling,” she says.

The issue of poor communication and the idea of members cast adrift to make the most of things for themselves is reflected in the fact that 47 per cent of retirees over 66 have not switched from accumulation into a pension or annuity account. Only 36 per cent have switched fully, and 14 per cent partially.

Of those who haven’t moved, 25 per cent say they don’t have enough superannuation to justify it, 18 per cent say they want to retain control of their savings, and 17 per cent say they are confused about the process itself, split between not knowing how to do it and not knowing enough about the accounts on offer.

Devitt says the “control” reasoning doesn’t stand up to rational scrutiny.

“They’re just in retirement, and for the funds that have not given them the support that they’re giving their pre-retirees, now these members are in retirement they’re just in that ‘freeze’ mode. They’re not really sure what to do, they’re not switching, they don’t know where to go in terms of sources.”

That uncertainty carries through to spending. Thirty-one per cent of retirees with savings are holding back from drawing down more of them, chiefly for a possible rainy day, cited by 43 per cent, and future health care needs, cited by 41 per cent. Among retirees who withdraw only the legislated minimum, 29 per cent spend less than 40 per cent of what they draw down, and only 26 per cent spend more than 90 per cent of it.

“It’s just this endless cycle,” Devitt says. 

“They’re holding on to all this money, but then they’re also on the other hand saying, somebody needs almost a million now to retire today, it’s so expensive. But they don’t actually know how to spend their money.”

Below standard

In February this year, ASFA adjusted its Retirement Standard for the first time in three years to raise the lump sum required for a “modest” to $110,000 for a single retiree and $120,000 for a couple, up from $100,000 for both, and to $35,503 a year for a single and $51,299 a year for a couple.

Devitt says the BPR study shows 60 per cent of single retiree households and 45 per cent of couple retiree households reporting an annual income below the ASFA Modest standard. Singles fall short at a higher rate, with no second income to absorb the same cost pressures, but couples are not far behind.

The industry-wide BPR satisfaction numbers show retail funds hold an overall satisfaction index score of 56.2 against 50.1 for industry funds and 54.1 for public sector funds, and small funds score 62.2 compared to 51.7 for large funds. 

Among individual funds tracked in the study, UniSuper leads on 63.2 and NGS Super follows on 62.0, both ahead of Colonial First State on 53.1, AustralianSuper on 52.2 and Australian Retirement Trust on 51.6. Meanwhile, Hostplus, on 47.6, and HESTA, on 46.2, sit at the bottom of the funds named.

The retail advantage is not evenly split between the two halves of a member’s journey. On retirement preparedness, measured among pre-retirees, industry funds score 47.3 against 50.6 for retail funds, a gap of 3.3 points. On retirement satisfaction, measured among retirees, industry funds score 54.4 against 60.1 for retail funds, a gap of 5.7 points. 

“It looks like a lot, but it’s not actually too much difference in scores,” Devitt says. 

“But it’s actually with the retirees where the main difference is.”

Devitt says retail funds tend to have stronger digital self-service, which reduces reliance on call centres, and larger marketing budgets that keep members aware of what is available to them. 

“They can log on and see it really easily. They’re not necessarily ringing up and staying on the phone to call centres for ages. They’ve gotten that nearly banking-style service down, and that’s really helping the retirees. They also tend to have better marketing budgets as well,” she says.

The clearest factor behind the divide in the data remains access to financial advice.

“All of the numbers that we have, if members are advised at all, it doubles their preparedness into retirement,” Devitt says.

“So they’re already going into retirement on a much better standing; and then for retirees, their satisfaction in retirement is much better, their confidence in their savings, and that their savings are going to last throughout the whole retirement, is much higher. It’s definitely the availability of advice that really plays into it.”

What a ‘successful’ retirement looks like

Pre-retirees and retirees converge on the same answer to what a “successful retirement” looks like, but the definition has moved sharply since 2022. Living comfortably and happily now tops the list as most important for 31 per cent of retirees, with being financially secure close behind at 29 per cent, both up from the high teens four years ago. 

But the big mover in the research is living free from worry, stress and work – this year, it was rated as part of a successful retirement by 22 per cent of retirees, up from 7 per cent in 2025.

“It’s again reinforcing those kind of financial goals, that’s what they’re really prioritising,” Devitt says.

“It’s nearly less now about the big trips to Europe and a new car. It’s I just want to feel secure and that the money is going to last and it’s not going to run out on me.”

Devitt says the reason more retirees are working longer is not a wish to stay mentally active – the explanation offered in past years – but a need for extra income to meet the cost of living. 

“There’s so many of them still working, and it is due to needing extra funds, not because they want to keep their minds active, which used to be one of the main reasons,” she says.

“When we look at the increased number of retirees working into their retirement nowadays, it’s because they are trying to make ends meet, because their expenses are more than they expected.”

* Conexus Financial is publisher of Investment Magazine.