The mindset—and modelling—behind a truly sustainable retirement.

Insights from the 2025 Global Retirement Reality Report, State Street Investment Management (formerly State Street Global Advisors).

Retirement confidence is rising—yet many Australians may be underestimating the complexity of retiring well.

Released in June 2025, the Global Retirement Reality Report from State Street Investment Management offers a timely snapshot of sentiment: confidence is strong, but the planning gap is real.¹

Beneath the surface, many Australians lack a clear, structured strategy for retirement’s most critical transition—moving from accumulating retirement savings to effectively drawing down retirement funds. The report highlights a growing need for more personalised advice, clearer retirement income strategies, and a broader view of financial wellbeing.

Key Takeaways

Retirement is evolving into a phased transition requiring flexible planning.
Converting retirement savings into steady retirement income is a growing priority.
Financial pressures beyond superannuation make holistic wellbeing essential.
Personalised advice and modelling are key to turning confidence into action.

Confidence With Caveats

Australians rank among the more confident retirees globally. This assurance is underpinned by several factors:

43% of respondents cite low short-term debt as a key source of confidence
43% of respondents express confidence in how their superannuation is invested
40% of respondents say their ability to save consistently provides reassurance²

Australia’s superannuation system offers a strong structural foundation—with regular contributions and default investment settings delivering a sense of security and momentum.

Yet this confidence can be misleading. While accumulating retirement savings often feels automatic—driven by regular contributions and default settings—decumulating retirement funds requires a very different mindset and a more deliberate strategy. This phase involves converting those retirement savings into sustainable, tax-efficient retirement income.

*Data source: 2025 Global Retirement Reality Report, State Street Investment Management.*

Income in Focus: A New Retirement Mindset

Australians are reframing how they think about retirement income. Over half (55%) now view it as a steady stream, not a lump sum, reflecting deeper awareness of income flexibility and resilience.³

Still, many grapple with key questions:

Will my retirement savings be enough to last?
How do I convert retirement savings into consistent retirement income?
What if markets falter or healthcare costs surge?

With phased retirements becoming the norm—blending part-time work with winding down—flexible income strategies and tax-smart drawdowns are essential. Financial modelling isn’t optional; it’s critical to navigating complexity with confidence.

This shift in mindset sets the stage for retirement’s most technically demanding phase: the drawdown.

The Drawdown Dilemma

If the accumulation phase is largely automatic, the drawdown phase is anything but. With retirement often spanning 25 to 30 years—or more—how individuals access their retirement funds carries major tax, lifestyle, and legacy implications.

Yet a significant number remain unprepared. Over one in four Australians (27%) lack a clear drawdown strategy⁴ and that figure rises to 39% among women, compared to 23% of men.⁵

The risks are real: drawing too much too early can deplete retirement funds during years when healthcare costs are highest, while drawing too little may restrict lifestyle or create inefficiencies in estate planning.

Effective drawdown is about more than meeting minimum withdrawal requirements. It involves sequencing retirement income across superannuation and non-superannuation assets, balancing retirement income certainty with investment exposure, and adjusting as circumstances change.

In this context, financial modelling becomes indispensable, helping retirees make informed decisions, test strategies, and ensure long-term sustainability.

“Over three in 10 Australians say they will continue to invest savings, drawing down over time, while over one in four don’t know what they will do.”

— 2025 Global Retirement Reality Report, State Street Investment Management

The Power of Modelling and Planning

Retirement confidence is built well before retirement and shaped by strong financial foundations and the ability to absorb financial shocks. Rising living costs, healthcare expenses and housing pressures continue to compete with long-term goals, often eroding financial capability.⁶

This broader state of financial wellness, defined as the ability to manage day-to-day expenses while staying prepared for the unexpected, is a prerequisite for effective planning.

Financial modelling brings clarity to this complexity. It allows individuals to test variables — retiring earlier or later, downsizing, medical costs—and translate uncertainty into informed, forward-looking decisions. Crucially, it underpins goals-based investing. Rather than chasing benchmarks, this approach aligns portfolios with actual spending needs by modelling how much income is required, and when, to support a desired lifestyle.

Together, modelling and goals-based investing form a cohesive framework: one defines the path, the other funds it.

Still, the planning gap persists with more than one in four Australians lack a clear drawdown strategy. By embedding financial wellness, goals-based investing and robust modelling into retirement planning, Australians can adapt with confidence and stay on course, no matter what lies ahead.

Confidence Needs a Counterbalance

Confidence is useful. It reflects trust in the system, and in one’s own decisions. But confidence without clarity can lead to poorly timed withdrawals, avoidable inefficiencies, and unanticipated shortfalls.

Australia’s super system is among the world’s strongest. But its very strength can lead to complacency—the belief that the system alone is enough. In reality, individual outcomes increasingly depend on personal decisions: when to retire, how to manage income, and how to plan for longevity and risk.

A visual model in the report depicts two diverging paths—one driven by false confidence and inertia, the other by true readiness and planning.⁷

*Source: 2025 Global Retirement Reality Report, State Street Investment Management.*

The Road Ahead

As retirement evolves, so too must the frameworks we use to plan for it. For individuals and advisers alike, the challenge is no longer simply about building wealth; it’s about managing it effectively through retirement and beyond.

That means:

Defining what retirement looks like on your own terms
Stress-testing how long assets may last
Planning for flexibility and the unexpected
Aligning portfolios with life stage and income needs through a goals-based lens

With the right modelling, strategy, and advice, Australians can turn optimism into outcomes. The question is no longer, “Am I confident?”—but rather, “Am I ready?”

If you’d like to explore what true retirement readiness looks like for you, reach out to your MGD team or start the conversation.

References
All data sourced from the Global Retirement Reality Report 2025, by State Street Investment Management. MGD Wealth has permission to use this information.

Page 5, commentary on confidence and planning gap
Figure 6, p. 12 – Top factors positively affecting confidence
Figure 8, p. 14 – Likelihood to keep money in retirement plan if it offers income
Figure 9, p. 15 – Respondents’ plans for their retirement savings
Page 15 – Commentary on gender gap in drawdown strategy
Figure 7, p. 13 – Savers’ top concerns about retirement planning
Figure 2, p. 6 – Diverging retirement outcomes

Any advice included in this article is general and has been prepared without taking into account your objectives, financial situation, or needs. As such, you should consider its appropriateness having regard to these factors before acting on it. Any tax information refers to current laws, is not based on your unique circumstances and should not be relied on as tax advice.