Why flexibility can be important in retirement

Retirement often brings a shift in financial priorities, as expenses and responsibilities evolve over time. Rising healthcare costs, supporting family members, or managing unexpected expenses can all affect how retirees use and rely on their savings.

For this reason, financial flexibility and predictable returns are becoming increasingly important when retirees consider how to invest their superannuation savings.

Why retaining flexible access to your super matters

For decades, much of the thinking around superannuation has focused on building wealth during the accumulation phase. However, retirement often presents a different challenge: turning savings into sustainable income while retaining the ability to respond to changing circumstances.

Unexpected costs can be common in later life. Medical treatments, home modifications, travel opportunities or financial support for children and grandchildren can all require access to funds at relatively short notice.

For many retirees, locking savings into products that restrict withdrawals or limit the ability to adjust investment options can reduce their capacity to respond effectively.

Investment options that allow retirees to access funds when needed, and adapt their investment approach as circumstances change, may offer greater peace of mind.

Retirement investing can be different

Traditional growth-focused investment strategies are often designed for people still working and contributing to super. These approaches prioritise long-term capital growth and typically assume investors can ride out market volatility over time.

Retirement, by contrast, is about drawing income. When retirees withdraw from their savings rather than add to them, market downturns can have a more immediate impact.

This shift means some retirees are looking for investment options that emphasise income stability, inflation awareness and reduced volatility, while still aiming to deliver returns above those typically associated with defensive assets like Cash.

A different approach: CPIplus

In response, Hostplus has introduced CPIplus, an innovative pension investment option designed specifically for the retirement phase.

CPIplus aims to give retirees long-term returns that are more consistent and less volatile than growth assets such as shares. At the same time, it generally targets higher returns than defensive assets such as cash or fixed interest.

A key feature of CPIplus is that returns are set in advance at a certain percentage above the Consumer Price Index (CPI). By linking returns to inflation, CPIplus aims to support purchasing power over time while providing greater clarity around expected income.

Retirees’ returns are not affected by the day-to-day performance of the underlying investments, and they will not receive a negative return due to a daily floor of zero.

Importantly, CPIplus is designed to support flexibility. Retirees can generally access funds when needed and switch investment options if their financial goals or personal circumstances change.

Balancing certainty and flexibility

As Australia’s population ages and retirement spans grow longer, financial strategies that balance access, certainty and inflation awareness are attracting increasing attention.

While no single investment approach will suit every retiree, options designed for the spending phase may help people feel more confident managing their super throughout retirement. Understanding how different options work, and how they fit with personal goals and circumstances, can make a meaningful difference over time. This is where accessing qualified financial advice, including digital tools or personal guidance through Hostplus, can help retirees make more informed decisions.

For some, the ability to access funds when required, alongside more predictable returns linked to inflation, can form part of a broader strategy for navigating retirement with greater financial confidence.

*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.