For decades, the “60/40” investment strategy — with 60 per cent of your savings in shares for growth and 40 per cent in bonds for stability — has been considered the gold standard for retirement. Many superannuation funds even follow this formula by default, and plenty of retirees trust it to see them comfortably through their later years.
But new research suggests this one-size-fits-all approach might not be as reliable as we think — and for many women, it could leave them running out of money far sooner than expected.
A study from Monash University has found that women are at significantly greater risk of exhausting their retirement savings than men if they rely solely on the traditional 60/40 mix.
Researchers ran computer simulations to see how well the strategy could support retirees over 25 years, based on what’s considered a “comfortable” lifestyle ($53,289 a year) and a “modest” one ($34,522 a year) in Australia.
The results were clear: women — who generally retire with smaller super balances in Australia and receive lower Social Security benefits in the US — faced far more financial pressure than men under this approach.
Monash Centre for Financial Studies Senior Research Fellow and lead author of the study, Dr Bei Cui, said since women have fewer external income streams, they were more likely to run down their savings earlier, especially if aiming for a comfortable lifestyle.
“The 60/40 strategy only works well when several conditions align, such as higher savings balances at the start of retirement, modest lifestyle expectations and positive early returns,” Dr Cui said.
“Many believe the 60/40 portfolio provides a safe balance, but in practice it does not deliver the same security for everyone, particularly for women who begin retirement at a disadvantage.”
The researchers concluded that while the 60/40 approach can work for some, it isn’t a guaranteed solution — and certainly not one that suits every retiree. They’re calling for more flexible, tailored strategies that consider factors like starting super balances, spending needs, and even the timing of retirement.
The team also recommended strategies that adjust withdrawals based on market performance, integrating other sources of income (like government support and tax benefits), and improving financial literacy so retirees better understand the risks and trade-offs involved.
Associate Professor Nga Pham, another co-author, added that women’s retirement security needs extra attention.
“Our study showed that female retirees are more vulnerable because they often start with lower balances and lower ongoing benefits,” Associate Professor Pham said.
“This puts greater pressure on their portfolios and increases the risk of running out of money.”
The research also shines a light on a bigger problem: women are still being left behind when it comes to superannuation — and not just because of investment choices.
According to the Super Members Council, unpaid super is stripping the typical working woman of more than $26,000 by the time she retires. For many, that’s the difference between financial comfort and ongoing stress in later life.
The analysis found that one in four working women misses out on super each year, with an average shortfall of about $1,300 annually. In just one year, that equates to $1.9 billion in unpaid super collectively. Over the past decade, the total has ballooned to $15.5 billion owed to women.
While the traditional 60/40 investment mix might still work for some retirees, it’s far from a guaranteed path to financial security in retirement — especially for women. Retirement planning needs to be more flexible, more personalised, and more realistic about the challenges many people face.
That might mean seeking professional advice, adjusting how and when you draw down your savings, or exploring additional income streams. In addition, it means continuing to push for policies that ensure super is fair and paid properly for all.
Read more: Why you shouldn’t ignore your annual superannuation statement
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