Three reasons why retirement feels harder than it should and what to do about it

Retirement used to feel like a destination. Now, for many Australians, it feels more like a moving target — and not because they’ve been careless.

Superannuation balances are at record highs. Our retirement system ranks among the strongest globally, and yet confidence in actually getting there — comfortably, securely and on your own terms — is quietly eroding.

A recent survey of 650 wealthy Australians and 354 financial advisers points to why.

What emerges isn’t a story of poor saving habits or bad investment decisions, but a growing uncertainty about the stability of the rules governing our retirement system.

Three forces are driving that fear. And understanding them is the first step to doing something about it.

1. The rules keep changing

Building a retirement nest egg takes decades. The rules surrounding super, however, move on much shorter timelines.

Since compulsory super was introduced in 1992, the framework has been amended more than 85 times. Contribution caps have shifted. Tax concessions have changed. Access rules have been adjusted.

The Division 296 tax on balances above $3 million — now passed and landing from July 1 this year — is simply the latest chapter in a story that shows no signs of ending.

Most Australians do not blame the system itself. In fact, 84 per cent still say Australia has one of the best retirement systems in the world.

But when the blueprint keeps changing, even disciplined, long-term savers can start to feel like they’re building on shifting ground.

Take the $1 million contribution window introduced in 2006–07. Australians were encouraged to move significant wealth into super under concessional tax settings. Today, earnings on some of those same balances will be taxed under Division 296.

It’s not hard to see why people are starting to question how long those incentives will last.

That’s why each rule change tends to prompt the same reaction: Does this affect me, and do I need to act.

In practice, the response comes down to three things: Does it affect my ability to contribute?; Does it change the super tax rate and after-tax returns?; Does it alter when or how I can access my money?

Not every reform will impact you directly, but speaking to a financial adviser about these pressure points is often the most valuable first step.

2. Confidence is being tested

Picture a dual-income couple in Perth’s outer suburbs. Mortgage under control, children in school. They’re contributing to super, investing where they can, and building toward a clear goal.

On paper, they’re doing well.

And yet, increasingly, there’s a gap between doing the right things and feeling confident about where that leads.

In our research, nearly seven in 10 high-net-worth Australians said they felt less confident about retiring comfortably than they did just three years ago — not because they’ve stepped off track, but because the path itself feels less predictable.

That plays out differently depending on where people are in life.

For Australians in their 50s and 60s, the impacts of further policy changes are immediate — affecting when they retire, how they contribute and how their savings are taxed. There’s less time to adjust.

For those in their 30s and 40s, the pressure comes from two directions: the financial demands of today, and the uncertainty of what the system will look like decades from now.

At that point, confidence starts to slip — and decisions begin to change.

3. Uncertainty doesn’t just change how people feel

Anxiety has a way of driving action — not always the right kind.

Some Australians are already pulling back — contributing less, or taking a more conservative approach to investing. Nearly two-thirds say they’re taking less risk than they were a few years ago, and a growing number have reduced or stopped contributions altogether.

Both are understandable. But whether they’re the right call depends on what’s driving them, because a knee-jerk retreat can erode a retirement plan just as steadily as good decisions build one.

Whatever changes — policy, markets, or life itself — a plan built across multiple structures is harder to knock off course than one that isn’t.

Five pillars of a resilient retirement plan

Max out super first: Superannuation remains the foundation. No other vehicle matches it for long-term, tax-effective accumulation. Make full use of contribution caps, including concessional contributions, spouse contributions and carry-forward provisions — before looking elsewhere.

Don’t stop at the super ceiling: Contribution caps mean many Australians hit a ceiling each year. Managed funds, exchange-traded funds and direct shares can allow wealth to keep growing beyond those limits — and remain accessible before preservation age if circumstances change.

Think about tax over decades, not just this year: The tax treatment of different investment structures compounds over time, just like returns do. Investment bonds, for example, are taxed internally at up to 30 per cent. With withdrawals tax-free after 10 years, they’re worth understanding for anyone building long-term wealth outside super.

Start estate planning earlier than you think: Australia is in the midst of the largest intergenerational wealth transfer in its history. Structures that allow tax-effective control over how wealth flows to the next generation — family trusts being one — give families direct say over who receives assets and when, and can be adapted as circumstances evolve.

Remember, liquidity is a planning asset, not an afterthought: A plan concentrated entirely in super can look strong on paper, but may leave little room when life doesn’t go as expected. Keeping a portion of wealth in accessible, diversified structures isn’t a concession to uncertainty — it’s a deliberate strategy for navigating it.

Retirement doesn’t have to feel like a moving target. The rules will keep changing — that much is certain.

But the Australians who retire with confidence won’t necessarily be the ones with the biggest super balance. They’ll be the ones who didn’t put all their eggs in one basket — and started thinking about that early enough to make a difference.

Felipe Araujo is chief executive of Generation Life.