This article was originally published in the print edition of Retirement Magazine Vol. 3

If you spend time talking with Australians approaching retirement, a pattern emerges pretty quickly. A lot of people aren’t short on savings. They’re short on confidence.

Our latest research with CoreData (note 1) makes this point clearly. Close to two-thirds of Australians aged over 45 say income certainty is central to feeling secure in retirement, yet only one in ten say they feel financially comfortable all the time.

And while balances have grown, so have the expectations: pre-retirees now believe they need almost $1 million to retire, an 18 per cent jump in just two years.

Meanwhile, 87 per cent don’t think the Age Pension will get them to a comfortable lifestyle.

None of this is irrational. Modern retirements are longer than ever, stretching 25 to 30 years, and many retirees worry their money won’t last the distance. Market downturns can be damaging when you’re drawing down, inflation eats away at purchasing power, and interest-based income swings are more frequent than expected. The risks are real, and people sense that.

Despite these realities, awareness of solutions such as annuities remains very low. In fact, our research shows that only around 10 per cent of Australians aged over 45 say they understand them well. So, while the desire for income certainty is high, the understanding of what delivers that certainty is surprisingly low.

The result is a retirement confidence gap. And that gap is exactly where guaranteed income can make a meaningful difference.
Predictability for the essentials

At the heart of retirement planning is a simple need: knowing that the bills are covered.

Our research confirms this. Retirees aren’t necessarily chasing extraordinary returns, they’re chasing peace of mind. They want the essentials locked in: utilities, groceries, insurance, healthcare, rates. Once those are covered, they can relax and enjoy the retirement they’ve worked hard for.

A sensible retirement strategy isn’t about choosing between flexibility and certainty. It’s about bringing them together in a layered strategy. For example:

• A guaranteed income layer to cover the non-negotiables for life
• A market-linked layer (like an account-based pension) for lifestyle choices, and
• The Age Pension, if eligible.

As advisers in our industry know, the approach of layering income streams gives retirees both stability and choice. It’s a structure designed to reduce anxiety about the future and to increase confidence. It works because it reflects how real households make, or would like to make, decisions.

What has changed

What’s changed recently is the flexibility of lifetime income solutions. Today’s products allow for inflation protection, withdrawal options, and death benefit features that help with estate planning. These aren’t the rigid offerings of the past. Modern solutions are blending protection with practicality.

There are moments when consumer need, policy momentum and industry capability all start lining up. Guaranteed retirement income is at that moment now.

Our research shows the needs of Australia’s retirees and pre-retirees are clearer than ever:

• Sixty-three per cent of Australians aged over 45 say guaranteed income is key to feeling secure
• Four in five say a comfortable retirement is their top financial goal
• Yet fewer than half feel they know how to get there.

Policy is also shifting in the right direction. The Retirement Income Covenant, now in existence for more than three years, has reframed the conversation from account balances to improving retirement income.

Treasury’s Best Practice Principles for retirement income solutions emphasise access to lifetime income products, albeit on a voluntary basis.

The Delivering Better Financial Outcomes (DBFO) reforms aim to expand access to quality advice, which is essential because products alone don’t build confidence; advice does.

“APRA’s work on capital settings for longevity products suggests clearer, more supportive frameworks are coming.”

And APRA’s work on capital settings for longevity products suggests clearer, more supportive frameworks are coming.

The capability of the industry is also leading the charge. The market is no longer experimenting with retirement income, it’s building it in earnest and designing solutions, tools and processes to make guaranteed income simple and accessible. It’s investing heavily in service and technology so advisers and super funds can model guaranteed income quickly, understand its impact, and integrate it seamlessly into client or member strategies.

All of this sets the stage for guaranteed income to be a mainstream part of retirement design.

Implications for advisers and super funds

If confidence is the outcome that matters most, advice and fit-for-purpose products are the pathway that gets people there.
Research (note 2) shows Australians who work with a financial adviser are up to 70 per cent more likely to understand their retirement needs. And that makes sense: when you’re trying to navigate longevity risk, guidance is foundational in navigating market fluctuations, inflation and changing lifestyle needs.

For super funds, retirement support is becoming a core expectation. Members don’t just want a product; they are looking for help, guidance and advice to turn these products into a strategy for their retirement. Clear income pathways, guidance at the right moments, and communication that moves away from account balances and toward lifestyle outcomes round out the expectations.

For advisers, layering guaranteed income with account-based pensions creates a retirement plan that feels both safe and flexible. When clients see their essentials covered for life, they stop asking, “Will my money last?” and start asking, “What do I want to do with the years ahead?” This shift to possibility is the real value of guaranteed income.

Now is the moment

Australia has built a world class super system. The next step is helping people use it with confidence. Longer lives should feel like a gift, not a gamble. And guaranteed income is one of the strongest tools we have to turn longevity into opportunity rather than uncertainty.

Acenda’s purpose is simple: confidence at every stage, and this means helping Australians retire with confidence. Guaranteed income isn’t the only answer, but it’s a vital part of the solution. And with demand rising, policy shifting and capability growing, there’s no better time to have confidence at the heart of retirement.

Notes:

1. Research commissioned by Resolution Life Australasia (part of the Acenda Group) and prepared by CoreData Research on retirement income, June 2025.
2. Best Possible Retirement 2025, CoreData Research

Sean McCormack is group chief commercial officer at Acenda Group, with more than 20 years’ experience in financial services. Previously he was chief executive officer of Integrity Life and interim chief executive officer of MLC Life Insurance, where he played a pivotal role in NAB’s divestment of MLC Life, leading its life insurance and group and retail partners businesses. Before his financial services career, he served as a commissioned officer in the Australian Army.