Produced in partnership with Generation Life.
Zero per cent bedtime, 100 per cent holiday. That’s the tagline being used in advertisements by a major cruising company, targeting Australia’s cashed-up retiree market.
Last year, 34.6 million passengers globally cruised across the seven continents, including around 1.3 million Australians, according to the industry’s tourism body, Cruise Lines International Association.
Baby boomers represented nearly a third of travellers, and their desire to spend more time with family has contributed to the rise of multi-generational cruising. The exponential growth of the cruising industry reflects how they are redefining retirement.
No longer content to slow down, a report by UK-based communications firm WPP and the Australian Bureau of Statistics, showed that Baby boomers are more active, adventurous, and focused on enjoying the fruits of their labour through travel, dining, and entertainment. We consider that this creates the need for the industry and government to surpass its responses to shifting expectations.
Helping more Australians to enjoy the wealth they’ve built
Arguably, minimum drawdown rates should further increase to reinforce the purpose of super and encourage retirees to use up more income in retirement.
In the financial year ended 30 June 2025, the returns from balanced super options were well above the 7.2 per cent annualised returns since compulsory superannuation began, according to data from Super Ratings. This should add steadily to account balances in retirement.
Changing retiree expectations may also demand a more urgent response from the superannuation and wealth management industry to offer different investment and retirement options, alongside financial advice and education, to support people to not only build a stable retirement income stream, but boost their confidence and understanding to spend it. All of it.
The industry is responding, spurred to action by the Retirement Income Covenant, which placed a legal obligation on superannuation funds to develop a retirement income strategy that assisted members by offering products to convert their savings into sustainable income.
The RIC demonstrated the importance and effectiveness of government and industry partnering for a public policy that aims to boost retirement confidence and improve long-term outcomes.
Layer upon layer
While superannuation is compulsory, the government does not mandate the use of other retirement income structures. Retirees are increasing seeking guidance on ways to generate stable income in retirement, with lifetime annuities emerging as a key option to manage longevity risk by providing an income guaranteed for life.
In Australia, retirees are looking to government for support in different ways. They want guidance on suitable investment and income structures, but more importantly, advisers often hear that clients seek more certainty around future tax, social security and regulatory settings. Stability, effective planning, and the combination of different products, such as superannuation and lifetime annuities, can boost the resilience of their overall retirement strategy.
Providing this certainty can go a long way in giving retirees the confidence to spend their hard-earned income in retirement on things that matter such as family, travel and entertainment.
Admittedly, there are some people who may never feel completely comfortable and confident running down their resources, no matter how much they have stashed away in super.
This highlights the case for building confidence layer upon layer, starting with super (and insurance), backed by professional advice, and reinforced by other retirement income streams such as lifetime annuities.
This approach can also provide a buffer against further changes to the superannuation rules; a scenario which should be baked into every retirement plan given the government’s track record.
While it’s impossible to know exactly what legislative changes lie ahead, we anticipate them coming.
We also have all been told that many are living longer than years before and are passing away with large amounts of unspent super, despite the apparent desires to live it up in retirement.
According to research by the Financial Services Council and NMG Consulting, in 2023 retirees were withdrawing 17 per cent less of their capital than an optimal system could achieve.
This shows us that superannuation alone is not enough to give Australians the retirement lifestyle they deserve, not necessarily because they don’t have enough, but because they don’t have the confidence to spend more of it.
For the wealth management industry, this presents one of the biggest opportunities.
Super funds and other product providers have an obvious role to play, but so do financial advisers. Not only can they assist clients to navigate the complex, constantly changing super environment, manage financial risks, and develop income strategies that align with their expenditure needs, they can reassure and encourage clients to spend more.
The entire ecosystem must work together to create retirement resilience, build confidence and help retirees cruise through retirement with the sun on their faces and peace of mind about their plans.
Felipe Araujo is chief executive of Generation Life.
