Why are so many retirees still spending like it’s 1991?

July 25, 2026 — 5:01am

Picture someone 10 years into retirement, too afraid to draw down beyond the government minimum drawdown. Their super is well above the national average, and they own their own home.

They could be comfortable, but instead, they’re living like it’s 1991, back in the recession we had to have. They’re skipping the trip to see their grandkids overseas, patching up a car that could have been replaced years ago, and turning the heating down a notch every winter to protect a super balance they will almost certainly never spend.

That’s not a rare story. It’s happening in kitchens and living rooms all over Australia. And here’s the hard part: 33 years ago, Australia launched one of the most successful financial experiments in the world – we forced every Australian to save for retirement.

Most people don’t realise that it worked magnificently – giving everyone who has worked a bucket of savings to deploy when they retire. But we never explained that to the people living it.

In fact, the enormous success of superannuation has created a new retirement problem we don’t discuss enough – people don’t know how to manage their money so they can confidently spend.

Most people in Australia don’t think of themselves as someone who has saved for retirement. You’ve saved almost accidentally. It came out of your pay before you ever saw it, went into an account you probably didn’t check for years at a time, and it grew while you got on with living your life – just like the experiment was meant to work, but better.

We’re a nation of brilliant savers, and terrible spenders, and it’s really not our fault.

You didn’t get a financial plan, or understand what you were invested in. You just didn’t touch it, and it turns out that for most average Australians that will be enough.

Except that now, most Australians are sitting on a reasonable-sized bucket of money, and very few are actually prepared for how to spend it.

That’s the part of the retirement journey the industry didn’t really expect to become a problem. Learning to spend after a lifetime of saving was never something people thought they would have to figure out. It seems bonkers that this is our country’s next real retirement challenge, and we’re hardly even talking about it.

But it is. And it’s showing up in some pretty telling numbers. According to the ABS Retirement Intentions data, only a third of retirees say they left work because they had reached retirement age or became eligible for their super.

The rest left because of ill-health, redundancy, or circumstances that weren’t part of any plan. That’s a symptom of a consumer who doesn’t understand their choices, and probably doesn’t have much of a plan for what comes next, after they leave the workforce.

Retirement confidence data also tells us a similar story. In Australia, retirement confidence sits at just 50 per cent, according to the AMP Retirement Confidence Pulse in 2025. It doesn’t tell us why, but my own teaching has shown me that for most people, it’s a lack of understanding of how super and the age pension, the two main income sources for retirement, actually work and how these can be turned into a reliable retirement income.

This tells me we can drive greater confidence by giving people a real sense of what having super means, and how it can be used to build a good life, instead of hiding that behind the “you need to get advice to understand it” veil of secrecy that has for so long surrounded retirement.

We’re a nation of brilliant savers, and terrible spenders, and it’s really not our fault. Nobody ever really showed us how to save – they did it for us. So nobody has ever shown us how to spend, either, and how to treat those retirement savings like they were intended – to cover our costs, then, with the excess, to enjoy them. Nobody prepared us for the day when that might even be a choice.

I hear a version of the same problem over and over in my Epic Retirement courses. Someone with a perfectly workable super balance, and access to a part age pension, terrified and doing anxious sums on the back of an envelope, assuming the worst because nobody has walked them through what their retirement account, often referred to as an account-based pension, will pay them over time, and how much they can get from the age pension.

And most certainly they haven’t been shown the products that now exist that specifically guarantee that they can’t outlive their money, that will probably allow them to access more pension and a secure income for life.

Most people aren’t broke. They’re just uninformed, unaware of what they don’t even know yet. Some can’t afford advice. Others don’t realise they could simply choose to educate themselves.

It seems the next big problem of retirement is teaching people how to use the money that we’ve helped them save, and giving them the tools and financial products to do that with confidence, for the rest of their lives.

That’s not something most people will solve through a personal relationship with a financial adviser because most Australians will never sit across the desk from one. And that is unlikely to change any time soon.

So, the real question isn’t who is going to give us advice to solve this very new age retirement problem. It’s what are you going to do to learn, understand your options and put in place frameworks to help you spend?

Here’s where I’d start:

1. Work out what your super balance really can turn into in terms of annual income, and not just at the lowest drawdown rate. Log into your fund, check your balance then head over to their retirement calculator, if it has one, or the Moneysmart retirement income calculator if it doesn’t. Put your balance in and let it show you what your super can actually afford to pay you.
2. Find out what you’re entitled to from the age pension, even if you think you earn or own too much to qualify. A part pension changes the whole equation because it often means you can draw down your super faster and still have a safety net underneath you. Use the Services Australia payment and service finder, or call the Financial Information Service, which is free and run by Centrelink specifically to help you understand this before you make any decisions.
3. Ask your super fund directly if it offers a retirement income product, one that guarantees you an income you can’t outlive, and that you could include in your retirement income, on top of your account-based pension. Most funds now have one, or a partnership with a provider that does, but almost nobody asks about it because almost nobody knows about them, the age pension benefits that wrap around them, and the way to use them as a tool to give you more confidence to spend.
4. And finally, give yourself the tools and permission to actually spend – without fear. Build a proper retirement budget. Work out what your regular costs are, and what you want to allocate to spending on the good bits of life. Align it with your income sources and what you can afford. And then set up a regular pay cheque from your super fund to your spending account that makes it easy for you to see and choose a better life than your fears might allow you to.

That will help you turn fear into a plan, rather than letting it drive your reality.

Bec Wilson is author of the bestseller How to Have an Epic Retirement and the newly released Prime Time: 27 Lessons for the New Midlife. She writes a weekly newsletter at epicretirement.net and hosts the Prime Time podcast.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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