What it could mean for your retirement and what you can do about it

Inflation is back, and it’s biting. Australia’s annual Consumer Price Index (CPI) reached 4.6% in March 2026, the highest since September 2023, driven by surging transport costs, persistently elevated housing costs of 6.5% per year, and food inflation running at 3.1%[1].

We’ve been here before, sort of

Australia experienced its most painful inflation era in the 1970s, when the OPEC oil shocks pushed CPI to a peak of 17.7% in 1974[2]. Wages and prices chased each other in a damaging spiral, interest rates climbed sharply, and real purchasing power was eroded for years.

Today’s environment is meaningfully different. The Reserve Bank of Australia (RBA) has a formal 2–3% inflation target and an independent monetary policy framework that didn’t exist in the 1970s[3]. Superannuation, now at a 12% employer contribution rate, helps provide a structural savings buffer that was previously absent[4]. Nonetheless, the parallel is worth heeding. Inflation that persists above the RBA’s band for an extended period quietly erodes real wealth.

The squeeze on households

The inflation impact is not uniform. It hits differently depending on your life stage.

Cost-of-living pressures are squeezing today’s cash flow, while inflation is simultaneously raising the retirement income target you need to hit. Every year of elevated prices increases the real capital needed to fund your retirement.

Retirees are particularly exposed because their spending skews heavily toward the very categories rising fastest, housing costs (up 6.5% annually), healthcare, and food. ASFA’s Retirement Standard for the December quarter 2025 now puts a comfortable retirement at $77,375 per year for a couple and $54,840 for a single homeowner, both at record highs[5].

What this means, and what you can do

The good news: this environment rewards preparation. Key steps worth considering:

  • Review your investment allocation. Cash and fixed-rate investments that seemed safe can quietly lose real value. Growth assets, such as equities, have historically provided meaningful inflation protection over the long run.
  • Reassess your retirement income needs. With costs rising, the income figure you planned for even two years ago may already be too low. Modelling your required return and stress-testing your portfolio against a prolonged inflationary scenario is essential.
  • Increase super contributions while you can. Pre-retirees should consider catch-up concessional contributions if their Total Super Balance was below $500,000 at the start of the year. The concessional cap of $30,000 per annum remains a powerful, tax-effective tool and is due to increase to $32,500 on 1 July 2026.
  • Consider the Division 296 tax implications. From 1 July 2026, super balances above $3 million will be subject to an additional tax on earnings. If you’re approaching this threshold, structuring advice is timely.

How your financial adviser adds value

Inflation is precisely the kind of environment where the gap between good advice and no advice widens considerably. A qualified financial adviser can model your specific retirement income gap, the difference between your projected income and your income requirements, and stress-test it against multiple inflationary scenarios. They can also:

  • Navigate the Age Pension means test and deeming rate changes to protect your entitlements.
  • Rebalance your portfolio toward real-return assets without compromising your risk profile.
  • Structure contributions and withdrawals to boost tax efficiency across the inflation cycle.
  • Assess whether lifetime income products, such as annuities, can provide inflation-linked certainty alongside your account-based pension.

The 1970s taught Australia that ignoring inflation is costlier than confronting it. The difference this time is that you have tools, a superannuation system, and access to advice that previous generations didn’t.

Find out how you can best use them by calling us today.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

[1] Australian Bureau of Statistics, Consumer Price Index, Australia — March 2026 (released 30 April 2026). abs.gov.au

[2] Western Union / ABS data, ‘Australia’s Inflation Rates Over the Years’; IMF, ‘Inflation and Monetary Policy Reform in Australia’ (elibrary.imf.org).

[3] Reserve Bank of Australia, Inflation Overview (rba.gov.au/inflation-overview.html); RBA Speech, Glenn Stevens, ‘Inflation Targeting: A Decade of Australian Experience’, April 2003.

[4] Australian Taxation Office / SIGA, Superannuation Rate 2026: New Rules & Key Changes — SG rate reached 12% on 1 July 2025.

[5] ASFA media release, ‘Super balances needed for comfortable retirement reach all-time high’, 24 February 2026

What ASIC’s New Research Really Tells Us About Retirement in Australia

I’ve been a financial planner for long enough to know that the scariest thing isn’t having too little super. It’s not knowing your current financial position.

That thought came back to me when I read the Australian Securities and Investments Commission’s (ASIC) latest research. With around 2.5 million Australians set to retire over the next decade, nearly half of those surveyed aged 50 to 66 said they were worried about outliving their savings. A sobering headline, no question[1].

But it wasn’t the anxiety statistic that caught my attention. It was what sat underneath it.

The number that tells the real story

Only 26% of pre-retirees demonstrated a strong understanding of retirement finances, yet 41% said they felt confident they could manage. Confidence is outrunning comprehension by fifteen percentage points.

And on the other side of the ledger, 48% of Australians aged 50 to 66 are worried they will run out of money, while 32% feel they are already behind in preparing, yet only 18% have a clear retirement plan[2].

So, we have people who are confident without cause, and people who are anxious without evidence. What both groups share is the same underlying problem: they haven’t sat down and done the numbers. The confident ones are often coasting on a vague sense that things will work out. The anxious ones are catastrophising into a void. Neither is making decisions based on their actual financial position, and both are worse off for it.

Why the gap exists

Retirement planning in Australia is genuinely complex. You’re trying to model super drawdown, Age Pension eligibility, investment returns, inflation, healthcare costs, and longevity, all at once, all with uncertainty baked in. Most people don’t have the tools or the framework to do that, and frankly, why would they? It’s not something we’re taught.

ASIC Commissioner Alan Kirkland noted that many Australians feel confused and overwhelmed by the complexity of retirement planning, and that without a clear plan, uncertainty can quickly turn into anxiety[3].

That matches what I see day to day. The anxiety isn’t really about money. It’s about not knowing. And not knowing often feels like not having enough, even when that’s not the reality at all.

What “enough” actually looks like

Here’s something that often surprises my clients: retirement can be more affordable than they think, particularly when you factor in the Age Pension.

According to the Association of Superannuation Funds Australia’s (ASFA) February 2026 figures, a comfortable retirement (covering private health insurance, a reliable car, regular domestic travel, and occasional international trips) costs around $54,837 a year for a single homeowner and $77,375 for a couple[4]. That’s the benchmark for a full, active lifestyle. Not luxurious, but genuinely comfortable.

Now factor in the Age Pension. As at 30 March 2026, the full pension currently provides $1,178.70 per fortnight for singles and $1,777 per fortnight for couples, significantly reducing how hard your super needs to work. Many who are eligible for at least a partial pension haven’t factored it into their thinking at all.

ASFA’s Report for the December 2025 quarter provides lump sum figures for a comfortable retirement for homeowners, $630,000 for singles and $730,000 for couples at age 67[5], are calculated on the basis that super is drawn down gradually while the Age Pension fills an increasing share over time. This is not a system where you’re entirely on your own.

The question I ask every new client

When someone comes to see me worried about retirement, the first thing I ask isn’t “how much super do you have?” It’s, “What does a good week look like for you in retirement?”

It sounds soft. It isn’t. Until you can describe your retirement, you can’t price it. And until you can price it, every number from your super balance, your pension entitlement, to your investment returns, is just noise.

The people who are genuinely well-prepared for retirement aren’t necessarily those with the most money. They’re the ones who have connected the dots between what they want and what they’ve got.

Research from the Financial Advice Association Australia found that 88% of advised Australians felt they had enough money for retirement, and 96% said having an adviser helped them stay confident even during periods of economic uncertainty[6]. That confidence isn’t accidental; it comes from knowing where you stand.

What to do if you recognise yourself in this research

ASIC has responded to its findings by launching a new Retirement Hub on the Moneysmart website[7], offering calculators and planning tools to help Australians model their super, Age Pension eligibility, and retirement income scenarios. It’s a solid free starting point and worth exploring.

But if you’re within ten years of retirement and you’re still operating on a vague sense of where things stand, a tool alone may not be enough. What you need is a clear, personalised picture including your income, your assets, your lifestyle target, and the strategy to connect them.

With 58% of pre-retirees saying they want to learn more about superannuation and retirement, the appetite is clearly there[8]. What’s missing for most people isn’t motivation; it’s a practical, structured conversation about their specific situation.

That’s the conversation I have every day in my practice. And usually, it ends with people feeling considerably better than when they walked in.

Not because the numbers were always perfect. But because knowing, really knowing, and understanding is almost always less frightening than the alternative.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

[1] 26-074MR From anxiety to action: Helping Australians to plan for their financial future | ASIC

[2] 26-074MR From anxiety to action: Helping Australians to plan for their financial future | ASIC

[3] 26-074MR From anxiety to action: Helping Australians to plan for their financial future | ASIC

[4] https://www.superannuation.asn.au/media-release/asfa-retirement-standard-super-balances-needed-for-comfortable-retirement-reach-all-time-high/

[5] https://www.superannuation.asn.au/media-release/asfa-retirement-standard-super-balances-needed-for-comfortable-retirement-reach-all-time-high/

[6] ASIC launches tools to help Australians plan for their financial future – IFA

[7] Retirement – Moneysmart.gov.au

[8] 26-074MR From anxiety to action: Helping Australians to plan for their financial future | ASIC

There’s a particular kind of financial anxiety that didn’t really exist a decade ago. It’s the feeling you get when you see someone on Instagram has just renovated their kitchen, someone on TikTok is posting from Amalfi, and someone on LinkedIn has just announced they’ve paid off their mortgage at 34. All before you’ve finished your morning coffee.

That feeling has a name, financial FOMO. And it’s doing real damage to real people’s financial decisions.

The comparison trap is built into the platform

Research from ING found that 38% of Gen Z Australians feel constant pressure to be financially successful, 21% regularly compare their financial journey to curated online portrayals, and 15% feel pressured to pursue side hustles they would rather avoid[1].

This isn’t weakness. It’s the intended outcome of platforms engineered to keep you scrolling, comparing, and feeling like everyone else is further ahead. Almost half of Australians say social media has influenced their purchasing decisions, while 41% actively follow financial content on social platforms. The line between inspiration and anxiety has become very thin.

ING’s research makes the dynamic clear: while digital channels open important conversations and introduce useful budgeting concepts, they also expose people to aspirational content that amplifies unrealistic expectations, high-risk trends, and financial comparison.

The curated highlight reel you’re measuring yourself against isn’t real. Nobody posts their credit card debt, their stressful mortgage repayments, or the inheritance that funded that renovation. You are comparing your entire financial reality to someone else’s curated best moments, and that comparison is never going to be fair.

Staying focused on what matters to you

The antidote to financial FOMO isn’t logging off forever. It’s having a clear enough picture of your own goals that someone else’s choices stop feeling like a verdict on yours.

In my practice, I ask clients a simple question early on: What does a genuinely good life look like for you in ten years? Not what looks impressive. Not what your friends are doing. What would make you feel settled, free, and satisfied?

Once that picture is clear, financial decisions become a lot easier to evaluate. Whether a particular investment, purchase, or life choice moves you toward your version of a good life is a far more useful test than whether it keeps pace with what you’re seeing online.

The Australian Securities and Investments Commission’s (ASIC) advice to Australians is equally applicable here. Take a moment to pause, sense-check, and verify before acting on financial content, especially when it’s delivered by people who may be profiting from your response. That pause is not just about avoiding scams. It’s about asking whether this decision is yours, or whether you’ve been nudged into it by an algorithm.

Building genuine financial confidence

Confidence with money doesn’t come from having the most. It comes from knowing where you stand, understanding your direction, and making deliberate choices rather than reactive ones.

Despite the pressures, 77% of Gen Z Australians intend to set financial goals, which reflects real optimism and genuine determination to improve their situations[2]. That instinct is worth protecting and channelling well.

A written plan, even a simple one, anchors you. It gives you something to return to when the noise gets loud. And today’s noise is very loud.

The goal isn’t to stop caring about money. It’s to care about your money, on your terms.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
[1] https://newsroom.ing.com.au/nearly-9-million-aussies-have-consumed-financial-content-on-social-media-with-gen-z-over-three-times-as-likely-as-gen-x-and-baby-boomers-to-have-done-so/
[2] ASIC Moneysmart Gen Z Financial Behaviours Report 2026

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Most of us left school knowing how to calculate the area of a triangle. Very few of us left school knowing how superannuation compounding works, how to read a credit card statement, or what a reasonable emergency fund looks like.

That gap has consequences. Research from UNSW has found that people with limited financial knowledge are more susceptible to scams, predatory lending, and poor investment choices[1]. And Australia still lacks a national financial capability action plan, while countries such as New Zealand, the United States, and the Nordic nations have moved to make financial education compulsory in schools. We are falling behind, and ordinary Australians are paying the price.

The skills that tend to matter most in real life are also the ones rarely taught: how to build a budget that reflects your life, how debt compounds against you over time, what your super is invested in and why it matters, how to distinguish a sound financial decision from a clever-sounding one, and how to have an honest conversation about money with the people you share your life with.

The good news is that self-education has never been more accessible. ASIC’s Moneysmart website[2] offers free, genuinely useful tools covering everything from budgeting basics to retirement planning. The financial basics are not complicated once someone explains them plainly.

And when it comes to the next generation, the most powerful thing parents can do isn’t finding the perfect app or worksheet. It’s talking openly at home. Normalise conversations about budgets, trade-offs, and what things really cost. Research consistently shows that scenario-based, real-world learning is what builds lasting financial understanding in young people[3]. Life provides plenty of scenarios. Use them.

Financial literacy isn’t a subject. It’s a life skill. And it’s never too late to learn it.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

 

[1] New report highlights Australia’s financial literacy gaps | The Educator K/12

[2] https://moneysmart.gov.au/

[3] Financial Literacy: Guidance | education.vic.gov.au

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