By Paul Feeney, Founder and Chief Executive Officer, Otivo
Here is a number that is hard to look away from. Among Australians who say they know exactly what they need in retirement and how to get there, 75% report high confidence about funding it. Among those with no plan at all, the figure is 4%. Not 40%. Four. That comes from Vanguard's How Australia Retires 2026 survey of more than 1,800 Australians, and it holds up after adjusting for age, income, home ownership and wealth — so it is not simply that wealthy people make plans. Something about the act of planning is doing work of its own. Here is what the research shows a plan actually changes, and what "a plan" turns out to mean in practice.
Australians with a detailed retirement plan are far more likely to report high retirement confidence than those without one. Vanguard's 2026 How Australia Retires report found 75% of those with a clear plan reported high confidence, against 4% of those with no plan, and 73% of those with no plan reported low confidence. The relationship persists after adjusting for age, income, home ownership and wealth.
How many Australians actually have a retirement plan?
Fewer than half. Around 45% of working-age Australians report having no retirement plan at all, alongside 36% of people already retired. Roughly 27% of both groups describe themselves as moderately planned, and 28% of working-age Australians consider themselves well planned, against 37% of retirees.
The pattern has been consistent across several years of this survey, which suggests it is structural rather than a blip. Close to one in two Australians is heading toward the largest financial transition of their life without a roadmap for it.
What does a plan actually change?
The most concrete finding is about the gap between what people want and what they expect. Australians were asked two questions: ideally, when would you like to retire, and realistically, when do you think you will be able to?
For those with a detailed plan, the gap between those two answers averaged 1.6 years. For those with no plan, it was 9.6 years. Same question, six times the distance.
That is a striking result because it cuts against the intuition that planning makes people more pessimistic by confronting them with the numbers. The opposite appears to happen. People without a plan default to an ideal retirement age of around 62 and a realistic one of nearly 72 — a decade of vague dread. People with a plan land at 61.6 and 63.3, which is both more optimistic and, judging by the ABS figure of 63.8 for Australians who actually retired in 2024-25, considerably more accurate.
The five behaviours associated with higher confidence
Vanguard's analysis identified five actions linked to higher retirement confidence. They are worth listing plainly because none of them requires wealth.
- Building a retirement plan.
- Improving financial literacy.
- Understanding how superannuation and the Age Pension work.
- Making voluntary super contributions.
- Engaging with super at least every six months.
The striking thing about this list is how modest it is. Four of the five are essentially about paying attention. Only one involves putting in money, and the survey found that nearly one in two Australians has never made a voluntary contribution at all.
What counts as a plan, though?
This is where the research gets more useful than it first appears, because "plan" in the survey does not mean a spreadsheet. Respondents were asked to self-assess against descriptions ranging from "know exactly what I need and how to achieve it" through "have a general idea but no clear plan" down to "no plan".
Crucially, the confidence benefit is not all-or-nothing. Australians with a good idea and most details planned out reported 57% high confidence. Those with a general idea and some details reported 27%. Both are dramatically better than the 4% recorded by people with nothing. Partial planning counts.
When asked what their plans covered, respondents most often named income and super — seven in ten working-age Australians and six in ten retirees. About one in two included housing, healthcare and aged care costs. Inheritance and legacy came up for around three in ten, and mainly among the most thoroughly planned.
What would you actually put in one?
The ASFA Retirement Standard gives a starting benchmark. As at the March quarter 2026, ASFA estimates a comfortable retirement for homeowners aged 65 to 84 costs about $78,566 a year for a couple and $55,923 for a single person. A modest lifestyle runs to roughly $52,473 and $36,434. Both assume the home is owned outright — for private renters at the modest level, the figures rise to about $69,002 and $51,164.
On the balance side, ASFA revised its lump sum estimates in February 2026 to $730,000 for a comfortable couple and $630,000 for a comfortable single, assuming home ownership and a part Age Pension. Anyone still working to the older $690,000 and $595,000 figures is now roughly $40,000 behind.
These are benchmarks rather than targets, and the honest caveat is that they describe an average household, not any particular one. But they turn "am I on track" from an unanswerable question into an arithmetic one, which is most of what a plan is for.
Where voluntary contributions fit
Of the five behaviours, voluntary contributions is the one with a direct financial mechanism behind it, so it is worth being precise about how the caps work.
Concessional contributions — the before-tax ones — are capped as a single combined figure covering employer super guarantee, salary sacrifice and any personal contributions claimed as a deduction. For 2026-27 that combined cap is $32,500, up from $30,000. It is not three separate allowances; employer SG at 12% is already using part of it before anyone adds a dollar.
The $32,500 is the general cap rather than an absolute ceiling. Members with a total super balance below $500,000 on 30 June of the prior year may be able to use unused cap space carried forward from the previous five financial years, which can allow a much larger contribution in a single year.
One disclosure matters for higher earners. Individuals whose combined income and concessional contributions exceed $250,000 in a financial year pay an additional 15% tax on concessional contributions above that threshold, bringing the total to 30% rather than 15%. Income for this test includes taxable income, reportable fringe benefits, net investment losses and the concessional contributions themselves. At 30%, those contributions remain concessional for anyone on the top marginal rate — it changes the arithmetic without reversing it.
Does professional advice make a difference?
The survey found Australians who have met with a financial adviser were more likely to report high retirement confidence — 39%, against 21% for those who never have — and the association held after controlling for wealth, income and age.
At the same time, Australians overwhelmingly plan using informal sources. Some 38% rely on their own research, 35% consult a partner, and 31% turn to family and friends. Around 27% have an ongoing relationship with an adviser, 26% use guidance from their super fund, and 25% use government resources such as ASIC's Moneysmart.
Getting started
A retirement plan does not need to begin as a document. The Vanguard research suggests the meaningful step is moving from no plan to a general one, because that is where the largest confidence shift happens.
Otivo's retirement planning module is built for exactly that transition — it considers Age Pension eligibility, downsizer contributions, age, salary, super balance, other investments, lifestyle goals and super access age together, and produces a picture rather than a spreadsheet. When customers follow Otivo's advice in full, they could be better off on average by $180,356 with optimised contributions, in today's dollars, by retirement. Otivo operates under AFSL and Australian Credit Licence No. 485665.
Frequently asked questions
What should a retirement plan include?
Australians surveyed most commonly included income and superannuation, named by seven in ten working-age respondents. About half also included housing, healthcare and aged care costs, and around three in ten considered inheritance or legacy. There is no single required list, and the research suggests a general plan covering income and housing is substantially better than none.
Is a general plan enough, or does it need to be detailed?
Both help. Australians with a detailed plan reported 75% high confidence and those with a good idea and most details reported 57%, but even a general idea with some details recorded 27% — against 4% for no plan at all. The largest gain comes from moving off zero.
How much do I need to retire in Australia?
The ASFA Retirement Standard estimates a comfortable retirement for homeowners aged 65 to 84 costs around $78,566 a year for a couple and $55,923 for a single as at the March quarter 2026, with lump sums of $730,000 and $630,000 respectively as revised in February 2026. These assume outright home ownership and a part Age Pension, so renters generally need more.
How much can go into super each year in 2026-27?
The general concessional contributions cap for 2026-27 is $32,500, covering employer super guarantee, salary sacrifice and personal deductible contributions combined. Members with a total super balance under $500,000 on 30 June of the prior year may be able to contribute more by using carry-forward cap space from the previous five years.
Sources
- Vanguard, How Australia Retires 2026 (August 2026) — vanguard.com.au
- ASFA Retirement Standard, March quarter 2026 and February 2026 lump sum revision — superannuation.asn.au
- Australian Taxation Office, Concessional contributions cap — ato.gov.au
- Australian Bureau of Statistics, Retirement and Retirement Intentions, Australia, 2024-25 — abs.gov.au
- ASIC Moneysmart — moneysmart.gov.au
Disclaimer
The information in this communication is current as at August 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.