By Mandy Mannix
Principal Advocate, Retirement, Challenger
Australians aged 60 and over have become our nation’s fastest growing demographic. With 2.5 million Australians set to retire in the coming decade, it’s time we ask the most fundamental question: are Australians retiring happy?
The Challenger Retirement Happiness Index aimed to do just that. Pleasingly, the research revealed that happiness is on the rise for older Australians, with a score of 69.5 on the Index, up from 68.9 in 2025.
The key drivers of happiness in retirement may surprise you though. It’s not how much money you have in the bank, rather the lifestyle that money empowers you to enjoy. Activities and hobbies (80), mental health (77), having a purpose (72), and social connectivity (71) were the leading drivers of a happier retirement.
Those who volunteered in their community were found to be the happiest among older Australians, with a happiness score of 77, 8 points above the happiness benchmark. These individuals also felt a greater sense of purpose (86% v 68%), enjoyed more hobbies and interests (95% v 82%), and maintained better social connections and relationships (83% v 71%).
Community and connectivity may be the secret to securing a happier retirement. Yet, a recent survey from Beyond Blue revealed a declining sense of community in Australia – a shift associated with rising rates of loneliness, anxiety, and declining mental health[1]. Investing in lifestyle, wellbeing, and community connectivity at every stage of retirement may be key to truly enriching our golden years and ensuring Australians enjoy retirement to the full.
Happiness in retirement requires confidence to spend on the little moments that spark joy. This can be extremely difficult, especially when that hard earned pot of retirement savings has to last you for decades to come.
Having enough money to enjoy retirement was a top priority for more than two-fifths (44%) of research respondents, ranking just behind physical health (58%) as the most important factor to a happy retirement.
Yet, as cost-of-living bites, inflation soars, and geopolitical turmoil continues, older Australians are starting to feel the pinch and questioning if they can afford to enjoy all retirement has to offer.
For the third straight year, cost of living continued to be a concern with older Australians worried about the impact on lifestyle (57%), financial security (54%), and running out of money in retirement (46%). These concerns can be especially acute in regional communities, where soaring petrol prices cause many to question whether that trip to town for a cuppa is really worth it.
Retirees have to live on a set amount of money for the rest of their lives and fear of running out (FORO) can severely impact enjoyment. Challenger’s research revealed this is especially the case for women (48%) and pre-retirees (49%) whose fears intensified with the rising-cost-of-living.
The top savings goals for today’s retirees? Certainty their money will last for life (72%), confidence to cover health and aged care costs (65%), and maintaining their lifestyle (53%).
Nearly 4 in 5 (76%) Australians aged 60 plus said they would be much happier if they had a guaranteed income for life. A regular, reliable ‘paycheck’ allows you to budget, ensures your needs are taken care of, and affords you the confidence to splurge on lifestyle factors that make retirement happier – a monthly lunch with friends, regular visits to the hairdresser, or finally taking that dream vacation.
Unfortunately, more than half of Australians aged 60 plus (59%) are unaware that guaranteed, lifetime income streams exist in retirement. This is especially evident in regional communities, where awareness drops to just 40 percent.
As Australians live longer, making your money last is becoming an even greater concern. In fact, for 67 percent of our research respondents, inflation and cost-of-living was the most important thing to plan for in later retirement.
While the dollar value of a lump sum super balance can seem like a lot when you retire, it has to last you a very long time. It can be hard to know how much to spend, especially knowing that inflation can halve the purchasing power of $1 million in 20 years’ time.
That’s why awareness, education, and giving more Australians access to guaranteed retirement income streams is so important. It bolsters financial security, reduces unnecessary underspending, and empowers retirees to more fully enjoy their golden years.
When it comes to retirement happiness, it is clear that mindset over money is what matters. Yet, financial confidence is what empowers us to truly enjoy retirement and spend on what really makes us happy – activities and hobbies, socialising, and pursuing our purpose.
Happiness is not about being the richest retiree but knowing you have enough to enjoy the retirement lifestyle you have worked so hard for, without the fear of ever running out of savings.
By empowering community, connectivity, and confidence we can unlock the secret to a happier retirement for every Australian.
[1] https://www.beyondblue.org.au/about/media/media-releases/Beyond-Blue-highlights-the-power-of-connection-this-World-Mental-Health-Day