By Philippa Billings, Chief Advice Officer, Otivo
The way you invest for retirement and the way you invest in retirement are different jobs, and the switch trips a lot of people up. For decades the goal was growth. Once you're drawing an income, a new priority joins it, making sure a bad year doesn't force you to sell assets at the worst time. Here's how investing changes once the pay cheques stop.
After retirement, investing shifts from pure growth to balancing growth, income and stability. Your money often stays invested through an account-based pension, but you're now drawing on it, so protecting against poor returns early on matters more. As at July 2026, most funds let retirees choose investment options ranging from conservative to growth to suit their needs.
How does investing change after you retire?
The goal broadens. In your working years the single aim is growing the balance, and short-term falls barely matter because you're not touching the money. In retirement you're drawing on it, so alongside growth you now need stability and income, and the timing of returns starts to matter as much as the average. That doesn't mean abandoning growth, since a retirement lasting decades still needs it to keep pace with rising prices, but it does mean growth is no longer the only consideration.
Why does sequencing risk matter more in retirement?
Because you're selling as well as holding. A poor run of returns early in retirement, while you're withdrawing an income, forces you to sell assets when they're down, leaving less to recover when markets improve. The same poor run in your accumulation years would have done far less damage, since you weren't drawing on the balance. This asymmetry, known as sequencing risk, is the single biggest reason investing changes once you retire, and much of retirement investing is really about managing it.
How do you balance growth and stability?
The usual answer is to hold both, in a mix suited to your situation. Some exposure to growth assets helps your money outpace inflation across a long retirement, while some steadier assets cushion the drawdown years and give you something to draw on when growth assets are down. Leaning too far towards stability risks your buying power slowly eroding, while leaning too far towards growth leaves you exposed when you can least afford a fall. The right balance is personal, and it's worth reviewing as retirement progresses.
What is a cash buffer and why do retirees use it?
A cash buffer is simply a pool of stable, readily available money set aside to fund your income needs for a period, so you're not forced to sell growth assets during a downturn. The idea is that when markets fall, you draw on the buffer and give your growth investments time to recover, rather than locking in losses. It's a common way retirees manage sequencing risk in practice, and how large a buffer suits any individual depends on their spending and comfort with risk.
Should your investment approach change as you age through retirement?
Often, yes. Early retirement and late retirement are different phases, the first typically has a longer horizon and can carry more growth, while the later years may lean more on stability as the timeframe shortens. Revisiting your approach every few years, rather than setting it once at retirement and forgetting, helps keep it matched to where you actually are. As with the rest of retirement, the suitable mix depends on your circumstances.
Frequently asked questions
Should I move my super to cash when I retire?
Not necessarily. Holding everything in cash can feel safe, but over a retirement lasting decades it risks inflation slowly eroding your buying power. Most retirees hold a mix, balancing stability for the near term with some growth for the long haul.
How much of my retirement savings should be in growth assets?
There's no single figure, since it depends on your timeframe, your income needs and how comfortable you are with short-term falls. The point is to keep enough growth to outpace inflation while holding enough stability to weather the drawdown years.
What is sequencing risk?
It's the outsized damage a poor run of returns does when it lands early in retirement while you're withdrawing an income, because you're selling assets when they're down. Managing it is central to investing after you retire.
Where to from here
Investing after retirement is a balancing act worth getting right. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a super investment options module that weighs your age, current option, historical returns and fees to help you understand which option could give you a better chance of extending your retirement income. It brings the balance into focus.
Sources
- ASIC MoneySmart — investing in retirement and sequencing risk — moneysmart.gov.au
- Australian Prudential Regulation Authority — superannuation investment performance — apra.gov.au
Disclaimer
The information in this communication is current as at July 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.