Why understanding retirement mindsets can help deliver better outcomes
Retirement is often talked about as though it is a single life stage. Work ends, income changes and people settle into a slower pace of life. But new research from the Institute for Lifetime Income suggests retirement is far more diverse than that1. Australians are experiencing retirement in different ways, influenced by their confidence, mindset and expectations for the future.
The research, conducted with more than 1,000 Australians aged 60 to 80, identified four distinct retirement lifestyles that shape how people spend, save and think about their future. These personas provide a new lens for understanding retirement behaviour and highlight why a one size fits all approach to retirement planning is unlikely to meet everyone’s needs.
At the heart of the findings is a simple but important insight: retirement outcomes are influenced by more than wealth alone. While financial resources matter, confidence often determines how retirement is experienced. Some retirees feel comfortable spending and enjoying the lifestyle they have worked hard to achieve. Others remain cautious, worried about future costs or running out of money, even when their financial position may be relatively strong.
The research identified four retirement personas. The Carefree retiree views retirement as a time of freedom and opportunity. They are more likely to prioritise travel, social activities, family experiences and making the most of their retirement years. Around 28% of retirees fit into this category and they generally report the highest levels of confidence about their financial future.
The Content retiree has also adapted well to retirement but in a different way. These retirees are typically spending less than they did while working, not because they have to but because they have embraced a simpler lifestyle. They have discovered that happiness does not necessarily require higher spending and are comfortable with a slower pace of life. Around one in five retirees fall into this group.
The Cautious retiree presents a different challenge. These individuals remain careful with spending because they are uncertain about what the future may bring. They often worry about unexpected costs, market fluctuations or the possibility of living longer than anticipated. While many are financially comfortable, uncertainty causes them to hold back on spending today to preserve financial security tomorrow. Approximately 14% of retirees fit this profile.
The final group, the Concerned retiree, faces more significant financial pressure. These retirees are cutting back not out of preference but out of necessity. Rising living costs, fears about future expenses and concerns that their savings may not last create genuine financial stress. Although they represent a smaller segment of retirees, their experiences highlight the importance of access to advice, guidance and support throughout retirement.
A key finding from the research is that retirement spending patterns are not fixed. Almost 80% of retirees report changing the way they spend money after leaving the workforce. Some spend more as they embrace the opportunities retirement offers, while others spend less because their needs naturally decline or because uncertainty encourages greater caution. Importantly, spending behaviours can evolve over time as circumstances, health and priorities change.
The research also highlights a significant confidence gap between retirees and those yet to retire. While most retirees report confidence that they can afford their desired lifestyle, people approaching retirement tend to be more worried about running out of money, covering health expenses and managing future living costs. Many are uncertain about how their spending will change once they stop working and how much income they will need to support their lifestyle.
Encouragingly, retirees generally report feeling more confident than pre retirees. Experience appears to help people adjust their expectations and gain a better understanding of what retirement actually looks like. However, confidence is not solely linked to wealth. Access to advice, education and guidance plays an important role in helping people make informed decisions and feel more comfortable spending their savings in retirement.
Perhaps the most important implication of this research is that retirement planning does not end when work stops. Spending patterns, priorities and concerns continue to evolve throughout retirement. Whether the challenge is creating reliable income, managing market uncertainty, meeting future aged care costs or simply gaining confidence to enjoy retirement, many Australians continue to seek support well after they have left the workforce.
Ultimately, the report suggests that retirement success should not be measured solely by how much someone has accumulated. Savings provide the means to retire but confidence provides the ability to enjoy it. Understanding the different ways Australians navigate retirement may help advisers, policymakers and retirees themselves make better decisions that lead to more secure, fulfilling and confident retirement outcomes.
1: Whitepaper. Four ways Australians navigate retirement. Institute for Lifetime Income, August 2026
Source: Challenger
