Rising cost fears higher among pre-retirees, survey shows

Binaya Dahal

Journalist

14 April 2026

Pre-retirees are significantly more anxious than current retirees about running out of money in retirement as persistent inflation deepens financial fears among Australians on the cusp of leaving the workforce.

The annual Challenger Retirement Happiness Index, conducted with YouGov and polling more than 2,000 Australians aged 60 and over, found nearly half of pre-retirees (49%) rank fear of outliving their savings as a top three concern, compared with 39% of those already retired.

It showed 57% worry about being able to maintain their lifestyle, while 54% of pre-retirees say rising cost of living has affected their financial security. Furthermore, women (48%) are more likely to fear not having enough money at the end of their working lives compared with men (43%).

Challenger’s Chief Executive, Customer, Mandy Mannix, said these higher prices can be felt even more by retirees who faces the reality of living on a set amount of money for the rest of their lives.

“Most Australians have felt the pressure of rising costs. Whether it’s paying for essentials like petrol, going out for lunch, or taking a holiday,” Mannix said.

“The dollar value of a lump sum when you retire can seem like a lot of money, but it has to last a long time. It can be hard to know how much to withdraw, knowing that the purchasing power of $1 million today can halve in 20 years’ time. The impact of inflation can be dramatic, and it is a real concern.”

On average, Australians aged 60 and over believe a person needs at least $70,398 a year to live comfortably, roughly 28% above the $54,840 figure recommended by the Association of Superannuation Funds of Australia.

“Today’s retirees are the first generation having built significant superannuation savings. Yet, after decades of focusing on saving, many retirees find it surprisingly difficult to switch to spending once they retire,” Mannix said.

Nearly three in four respondents said they would be significantly happier with a guaranteed income for life, yet more than half had never heard of lifetime income streams as a retirement strategy.

Furthermore, one in three said greater financial literacy would improve their retirement happiness, with free guidance from superannuation funds or banks (52%) the most preferred channel, ahead of government agencies (50%).

However, overall happiness among older Australians edged up marginally, with this year’s Index rising to 69.5 from 68.9 in 2025. Volunteers emerged as the happiest cohort, scoring 77 against an average of 69, while married respondents and homeowners also scored above the benchmark.

“One of the strongest insights is the powerful role purpose plays in retirement happiness. People who volunteer, stay active in their communities, and maintain hobbies and interests consistently report higher levels of happiness,” Mannix said.