Looking back on 2024 there were some major developments, regulatory shifts, and innovative solutions that emerged that promise to reshape retirement planning for millions of Australians.
We saw the Federal Government and regulators sharpen their focus on retirees—a response to the significant demographic shift, with 710,000 Australians expected to retire over the next five year. Treasurer Jim Chalmers has pointedly identified the core issue—most retirees lack access to appropriate financial products that can truly maximize their superannuation over their lifetime.
“The problem is most retirees do not have access to the appropriate products to help them maximise their super over their lifetime.”
Treasurer Jim Chalmers
While this challenge remains significant, progress has been made. More retirees than ever now have access to lifetime income products—a critical tool for providing sustainable retirement incomes. As of 2024, 12 superannuation funds, platforms, and life insurance companies offer these products, with further innovation and new offerings expected in 2025.
At Optimum Pensions, we are encouraged by these developments. We look forward to seeing more superannuation funds and financial advisers incorporate lifetime income products into retirement planning conversations where appropriate.
However, superannuation funds must continue to refine their retirement income strategies, including developing meaningful metrics to monitor their progress. The key question remains: Are they truly improving their members’ retirement outcomes?
Regulators have made their intentions clear. APRA and ASIC are set to work closely together in 2025 to ensure superannuation funds meet their obligations under the Retirement Income Covenant. ASIC has even foreshadowed potential enforcement action against funds that fail to deliver, underscoring the growing urgency for trustees to actively address retirement outcomes for their members.
And retirement planning goes beyond product availability. An often-overlooked yet essential factor is helping retirees incorporate realistic life expectancy assumptions into their plans. Late in 2024, the Australian Government Actuary released updated Australian Life Tables based on the 2021 Census. This presents a timely opportunity for superannuation funds and advisers to review their assumptions and ensure they are fit for purpose—not simply relying on average life expectancy, which can leave retirees vulnerable to financial shortfalls.
As we look to 2025, there is more work to be done. By focusing on product innovation, regulatory compliance, and realistic retirement assumptions, we can work together to help Australians retire with greater confidence and financial security.
The path forward is promising. With continued collaboration between regulators, financial institutions, and industry experts, we are witnessing the early stages of ‘redesinging retirement’. Each innovation, each new product, brings us closer to a future where every Australian can look forward to a retirement that is not just financially sustainable, but truly fulfilling. The challenges are significant, but so is our collective commitment to solving them. As we move forward, there is genuine hope that the next generation of retirees will have access to more sophisticated, personalised, and supportive financial solutions than ever before.