Retirement dream a nightmare for some as costs surge

SURGING living costs are making it tougher for Australians to save for or even imagine their retirement, according to new research.

Just 28 per cent of Australians feel prepared for retirement, down from almost two in five just a year ago, according to Brighter Super's annual retirement income report.

Inflation was the most concerning factor for three in four Australians, including both retirees and pre-retirees, Brighter Super's investment trends head of research Julian Cappe said.

"Rising everyday costs are making it harder both to save and also to picture what retirement will actually cost," Cappe said.

"The number of pre-retirees who are feeling very well prepared for retirement is at its lowest point in a decade."

Sticky inflation, exacerbated by soaring fuel costs due to the US-led war on Iran, prompted the Reserve Bank to lift interest rates to 4.85 per cent earlier in November, coming as a major blow to mortgage holders.

§ Retirement income falls short of living costs

More than half of Australian workers expect their retirement income will not be able to cover their expected living costs, forcing them into tough decisions as their working life winds down.

"For 54 per cent of pre-retirees facing that income gap, they are having to accept a more modest retirement or a later retirement," Cappe said.

The report, which surveys more than 4000 Australians aged 40 and over across August and September, found the percentage of retirees who felt they were living comfortably fell from 58 per cent in 2025 to 38 per cent in 2026.

Meanwhile, the proportion of retirees struggling to make ends meet more than tripled from four per cent to 13 per cent.

"The number of retirees that are really struggling, that are really facing financial pressures in retirement, has really jumped up significantly year-on-year," Cappe said.

While two in five felt they had taken the right steps to prepare for retirement, there was a common regret for those under pressure.

"The number one action that they wish they would have taken is contributing more into super," Cappe said.

"Over 30 per cent of retirees wish that they had contributed more into super ... and that number is up from last year."

§ The cost of advice and options to close the gap

The report found people who sought financial advice were more likely to make extra contributions and to be less anxious about their prospects. 

However, these factors could also correlate with higher incomes, underscoring unequal access to professional help.

"Advice is expensive, so lower advice fees is certainly an area where many heading into retirement would be looking to their super fund to be able to provide them with," Cappe said.

Online income projection tools and calculators, along with personalised support, could help close the advice gap.