5 Practical Steps for Australians Nearing Retirement
A recent paper, Riding the retirement wave: Getting Australia ready (MLC, 2025), says Australia is entering a retirement decade where the hardest part is no longer building super. It is turning super into a reliable income that lasts and feels safe to spend.
Key messages from the paper
First, retirements are rising fast, and retirement income is becoming a whole system challenge. The paper notes Australia’s super pool is now over $4 trillion and highlights the scale of Australians moving into retirement over the next decade (MLC, 2025). This matters because the decisions retirees make in the first few years can shape their lifestyle for decades.
Second, confidence is low and that changes behaviour. Only 34% of Australians feel financially confident, and many expect to rely on the Age Pension (MLC, 2025). The paper also shows advised Australians report stronger wellbeing and preparedness than those without advice (MLC, 2025). A lack of confidence often leads to either spending too little, holding too much cash for too long, or making sudden changes when markets wobble.
Third, retirement is often longer than people plan for, especially for couples. Life expectancy at age 65 is higher than many assume, and for couples there is a meaningful chance one partner lives into their 90s (MLC, 2025). Planning for “average” can leave people exposed, especially if care costs rise or one partner is left managing finances alone.
Finally, the paper says most retirement outcomes come down to managing four predictable risks (MLC, 2025). These are market falls around retirement, living longer than expected, inflation over time, and emotional decision-making that leads to underspending or panic moves.
5 practical actions you can take to be prepared
Start by planning around income rather than your super balance. Estimate your essentials first, then add lifestyle spending, then add a buffer for surprises. A simple way to do this is to map your spending into three buckets. Needs, wants and contingency. This becomes your “income target” and improves decision-making quickly.
Make the early years of retirement a priority. The paper highlights sequencing risk as most dangerous around the retirement transition (MLC, 2025). In practice, that means thinking about how you will fund the first few years of spending without being forced to sell growth assets during a downturn. Your strategy should match your cashflow needs and your comfort during volatile periods.
Give your money jobs using a layering approach. The paper supports separating money for basics, buffers, lifestyle and legacy (MLC, 2025). Practically, this can look like ensuring your essentials are covered first, then keeping a dedicated buffer for health costs and big one-offs, then allowing a defined lifestyle amount you can spend guilt-free, and finally deciding what you want to preserve for family or giving. This approach often reduces anxiety because it makes your plan feel more predictable.
Bring Age Pension planning into the picture earlier than most people do. The paper notes many Australians expect to rely on it (MLC, 2025). Even if you think you will not qualify, it is worth understanding how eligibility works and how it might interact with your retirement timing, your drawdown approach, and how assets are held. Early modelling can change decisions you make years before retirement.
Do the final step that most people avoid until it’s urgent. Get professional advice. Retirement income strategy is a specialised area because it combines cashflow design, risk management, tax, super rules, and social security. A qualified financial adviser can help you stress-test your plan against longevity, inflation, and market shocks, and give you a clear strategy you can follow with confidence. It is also a strong way to avoid the common trap the paper highlights, which is underspending out of fear, even when you can afford a better retirement (MLC, 2025).
References
MLC, 2025, Riding the retirement wave: Getting Australia ready.
