Australia’s retirement system is undergoing rapid transformation. Demographic change, global economic volatility, inflation pressures and accelerating technological innovation are reshaping how Australians save, invest and draw down their superannuation. 

These shifting dynamics were front and centre at the 33rd Colloquium on Pensions and Retirement Research, co-hosted by the Centre for Population Ageing Research (CEPAR) and the School of Risk & Actuarial Studies, with support from the Innovations in Risk, Insurance and Superannuation (IRIS) Knowledge Hub at UNSW Business School.

Katja Hanewald, Associate Professor in the School of Risk and Actuarial Studies at UNSW Business School and program manager of the event, said the strong turnout and cross-sector engagement underscored the Colloquium’s value in highlighting the urgent need for Australia’s retirement system to adapt to longer lives, increased uncertainty and more complex financial decisions.

The opening panel was moderated by David Bell, Executive Director at The Conexus Institute. It featured Guy Debelle, Chair of the Board at FundsSA; John Pearce, Chief Investment Officer of UniSuper; Craig Thorburn, Director of Thought Leadership at the Future Fund; and Professor Susan Thorp, Professor of Finance at the University of Sydney Business School. The panel discussed how global economic and geopolitical changes are reshaping long-term retirement planning.

Longer lives and shifting demographics are reshaping retirement risk

UniSuper’s latest research shows 81 per cent of pre-retirees expect to keep working in some form, driven not only by financial needs but by a desire for purpose and social connection. Millennials and Gen Xers are leading this shift, with the majority anticipating hybrid, flexible, or part-time work well into retirement.

These changing attitudes signal that superannuation must support more dynamic retirement pathways, the need for social and more purposeful engagement alongside financial security. One of the strongest messages of the event was that Australians are ageing differently from any time in the past. People are living longer, but the pattern of ageing is changing in ways that make retirement planning more challenging.

Prof. Susan Thorp highlighted the way longevity is evolving. “Compared with several decades ago, people are less likely to die in their 60s and 70s and more likely to die in their 80s and 90s,” she said. This “postponement and compression” of mortality means that, on average, retirees will need their savings to last much longer.

Life expectancy (years) at birth in Australia

Prof. Thorp pointed out that longer lives come with new vulnerabilities. For example, dementia is now the leading cause of death in Australia, and its growing prevalence raises difficult questions around financial autonomy and support. “People with dementia have lower capacity for financial planning and financial management, which is not good news for retirement wealth management in any world order,” said Prof. Thorp.

Family structures are also changing. With fertility declining and children living more geographically dispersed lives, retirees may find themselves with fewer informal support networks. “These family networks in Australia and around the world are likely to become more sparse, and alternative forms of support are going to be needed,” Prof. Thorp said.

For retirees, this means planning for more years, more uncertainty and more reliance on formal systems rather than family help.

Why Australians struggle with spending in retirement

Another major theme was the persistent pattern of retirees withdrawing too little from their superannuation. Despite having accumulated balances that could support higher living standards, many Australians still default to the minimum drawdown, although new research suggests this trend might be changing.

This behaviour stems from uncertainty about how long their savings will last, limited financial literacy and fear of exhausting their nest egg. Presenters noted that retirees often find it difficult to choose an income level that balances their current lifestyle with long-term financial security.

Prof. Thorp captured the core challenge: “Setting your own income in the new world order is a management problem that is becoming harder.”

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To address this, superannuation funds and researchers are developing tools to help retirees understand how much they can safely spend. The evidence suggests that when retirees are provided with personalised guidance and clear projections, they gain confidence to draw down more sustainably – improving wellbeing and smoothing consumption.

But as the speakers pointed out, designing these tools requires careful attention. Retirement is deeply personal, tied to identity, aspirations, health and family circumstances. “Everyone has different priorities. Some of those priorities don't make rational sense, but they’re just people’s personal priorities,” Prof. Thorp said.

So any system designed to guide retirement behaviour must respect this individuality while still offering meaningful guardrails.

Economic volatility is rewriting the rules of retirement planning

The colloquium also examined how global economic and geopolitical dynamics are changing investment conditions. From these discussions, several major themes were clear:

1. Markets are entering a new era of uncertainty: Traditional assumptions about low inflation, stable global trade and predictable market cycles no longer hold. Governments are spending more, geopolitical tensions are rising, and inflation pressures remain unpredictable.

2. Investment returns may be harder to achieve: Differences in productivity across regions, increasing fiscal pressures and the unwinding of decades-long economic trends mean that super funds may face more volatile returns.

3. Technology and the energy transition are reshaping capital flows: AI, renewable energy investment and major infrastructure spending are creating new opportunities, but also new risks.

Learn more: One size doesn't fit all: Is the super system failing vulnerable members?

For retirees and future retirees, this environment means greater exposure to investment volatility and a greater need for adaptive planning. It also increases the importance of tools that can help Australians understand how different scenarios could affect their long-term finances.

Digital tools, AI and the future of advice

Across multiple sessions, speakers emphasised the growing role of digital tools in guiding retirees through complex decisions. But with this innovation comes an important question: what are the limits of technology when money, trust and long-term wellbeing are at stake?

Speaking on the impact of climate change on social security systems and the role of artificial intelligence in the future of superannuation trusteeship, UNSW Law & Justice Professor Scott Donald said: “A lot of these laws are written in an old world, pre-digital, where all your advice was given face-to-face,” he said. As a result, funds face significant regulatory hurdles when using technology to deliver personalised guidance at scale.

While he acknowledged the benefits of automation, Prof. Donald explained that digital tools can support decision-making but cannot replace the need for human reassurance during life’s biggest financial transitions. “You're dealing with one of the biggest moments in someone’s life… trusting a digital tool gives people some comfort, but they really want to talk to a human,” he said.

A hybrid model – technology for clarity and personalisation, humans for judgment and emotional support – could define the next decade of retirement innovation.

Strong institutions matter more than ever

A recurring theme throughout the colloquium was the importance of preserving Australia’s strong institutional frameworks. Trust in regulation, central bank independence, clear policy settings and robust governance structures will be essential as the nation navigates demographic change, economic volatility and technological disruption.

“Successfully managing all of this very challenging global change depends on preserving inclusive institutions… Those that support property rights, trust, checks on power, access to education, sound financial systems, fair trade, good markets,” Prof. Thorp said.

Learn more: Olivia S. Mitchell on reducing longevity risk in retirement

These foundations underpin not only investment markets but also the confidence Australians place in their retirement system, arguably the most important determinant of effective long-term financial behaviour.

The colloquium made clear that Australia’s retirement system is entering a new and complex era. Longer lives, rising uncertainty, greater individual responsibility and rapid technological change are challenging long-held assumptions about how Australians save and spend in retirement.

But these challenges also present an opportunity: to design better tools, clearer communication, more inclusive institutions, and a system that supports Australians throughout their entire retirement journey, not just at its start.