How to be more certain your super will perform in retirement

During your working years, income from employment covers your everyday expenses, while your super quietly builds in the background. In retirement, that changes. Your super becomes a key source of regular income, helping you meet the same ongoing costs you have always had such as groceries, utilities and healthcare.

Another change is how much you rely on your savings. Without wages coming in, the consistency of the income your super can generate becomes much  more important. Market-linked investments can still grow over time, but year to year fluctuations can make planning and budgeting more challenging.

This leads to a natural question: how reliably can your super provide the income you need throughout retirement?

Market-linked investments can deliver growth over the long term, but their variability can add uncertainty for retirees drawing a regular income. One approach to managing that uncertainty is CPIplus, a Hostplus only pension investment option designed to provide greater predictability for retirees.

How CPIplus is designed to provide greater certainty for Hostplus retirees

CPIplus works differently from traditional market-linked options. A level of return above inflation is set in advance for a defined period.* This means your returns are not driven by daily market movements. Instead, members have clarity about the rate their investment will earn over that period.

For retirees, this can make planning simpler. With a pre‑set return for the term, there may be fewer surprises and greater reassurance when budgeting for regular income.

Cash feels safe, but is it protecting your lifestyle?

Many retirees understandably gravitate towards cash. The balance does not fall, and that stability can feel reassuring.

However, while a cash balance may remain steady, the cost of living does not. Over time, inflation erodes the purchasing power of that cash. Even modest price increases can reduce what your money can buy across a long retirement.

In this sense, not losing money on paper may still mean losing ground in real terms.

How CPIplus approaches inflation

CPIplus is designed with inflation in mind. As the name suggests, it aims to deliver a fixed return above the Consumer Price Index (CPI).

Rather than focusing solely on protecting the account balance, the strategy is designed to protect purchasing power. By targeting a return above inflation, CPIplus seeks to help preserve what your retirement savings can buy in real terms. 

Is playing it safe sensible?

Avoiding market losses can be a sensible instinct, particularly once regular wages have stopped. But safety in retirement is broader than simply avoiding fluctuations.

If returns do not keep pace with inflation, retirees may face a gradual decline in their standard of living, which can put greater pressure on how long their savings last.

The challenge is finding a balance between stability and growth.

Finding the right balance

This is where some retirees look for a middle ground. CPIplus considers prevailing inflation and sets a return above it for a defined period. Market movements do not directly affect returns during that period. By targeting outcomes above inflation, the option is designed to support purchasing power while offering greater predictability.

This approach can help retirees manage income needs without being exposed to short term volatility while still recognising that retirement strategies need to support both stability today and lifestyle needs over the long term.

Planning with greater confidence

Retirement income strategies are personal and should reflect individual goals, timeframes and risk tolerance. For some retirees, traditional diversified options may still be suitable. For others seeking greater predictability in their retirement income, CPIplus may be worth considering as part of a broader strategy.

With clearer expectations about income, planning your lifestyle in retirement can feel more stable and less stressful.

As always, it is important to consider your circumstances and review the relevant product information before making any decisions.

*Though returns above inflation are predetermined annually, Hostplus can shorten the return period. Hostplus may also adjust the rate of return with at least 30 days’ notice. You must have a Hostplus Pension account. General advice only. Consider the Hostplus Pension PDS and TMD available at hostplus.com.au, and your objectives, financial situation and needs, which have not been accounted for, before deciding. Past performance is not a reliable indicator of future performance. Issued by Host-Plus Pty Limited ABN 79 008 634 704, AFSL 244392 as trustee for the Hostplus Superannuation Fund ABN 68 657 495 890.