The 4 key factors to retiring with confidence

20 March 2024

Feeling confident in, or as you approach, retirement is about more than money. An AustralianSuper-Monash University study* found maintaining good health and setting specific goals are more important to Australians over 50 than the amount of their savings. The study is aimed at improving retirement outcomes for all Australians. It’s the first of its kind to examine how people think and feel about finishing their working life.

When planning for retirement, your financial position is only one piece of the puzzle.

The AustralianSuper Monash University Retirement Confidence Index (RCI) considers 4 key areas that affect a person’s confidence:

  1. Financial awareness and skills
  2. Health and wellbeing 
  3. Social factors 
  4. Retirement awareness and planning 

Dr Eraj Ghafoori, a behavioural economist, says it’s a common belief that if you don’t have enough money by retirement, you’re in real trouble. But that’s not necessarily the case.

‘According to the model, your mental and physical health and who you’re in touch with accounts for 50% of your confidence in retirement,’ says Dr Ghafoori. ‘That means half of your experience comes down to who you know, who you’re in touch with, and how well you feel.’


The AustralianSuper Monash University Retirement Confidence Index (RCI)

The RCI, which started in 2017, surveys approximately 3,000 Australians. The first study of its kind, it attempts to gain an in-depth understanding of how Australians think, feel and behave as they approach or experience retirement.

Report author, Dr Fernanda Mata, is a research fellow at BehaviourWorks Australia (Monash University). Dr Mata says the survey’s aim is to highlight factors – within a person’s control – that can be improved to help them feel confident in retirement, regardless of their financial position.

The report found that, overall, men had a higher level of confidence than women. Dr Mata believes this is in part because of the gender super gap.

‘We also know that women are less confident in their retirement because they have higher levels of financial anxiety and they engage less in planning for retirement,’ says Dr Mata.

Formal education contributed to higher overall scores, as did home ownership and being in a marriage or de facto relationship. Also, retirees had a higher level of confidence than pre-retirees.

‘From a pre-retiree’s perspective, it’s a case of the unknown,’ says Dr Eraj Ghafoori. ‘Then once they step into retirement, the overall experience perhaps doesn’t seem to be as scary as they thought it would be, based on our measure of anxiety before and after retirement.’




The 4 factors of retirement confidence

Financial awareness and skills

This looks at a person’s level of financial literacy, attitude, behaviour, control and financial anxiety.

On average, women score significantly lower than men for financial literacy.

‘The higher your financial literacy, the lower your anxiety in relation to your finances, and the more likely you are to plan for retirement,’ says Dr Mata.

The survey found financial literacy was linked to cognitive ability, higher income, home ownership, having more assets than debts, and being financially risk averse.

While women had lower financial literacy and higher financial anxiety, the survey found they were more likely to save for the future. This was also true of retirees, more educated respondents, homeowners and those in a de facto relationship or married.

Health and wellbeing

This measures the importance of physical and mental health.

When asked how confident they felt about retirement, respondents with excellent physical health had a higher level of retirement confidence than those with poor health.

‘If you’re healthier and you have a higher level of wellbeing, you’re more capable of looking after yourself, both physically and mentally, and that makes you more confident,’ says Dr Ghafoori.

Dr Mata says poor health can also impact on your financial position – or force you into early retirement.

‘If you’re unable to continue daily activities like cooking and cleaning, you may have to pay someone to do that for you, or you may have ongoing medical expenses to budget for,’ she says.

When it comes to mental health, women fared better than men.

‘We found that women feel more socially integrated and we know that’s associated with better mental health,’ says Dr Mata.

Being married or in a de facto relationship, having dependent children, owning your own home and having a university degree also saw an improvement in mental health.

Social factors

This examines the impact of social connections.

The survey found women and those who were married or in a de facto relationship were more socially connected.

‘Having a partner or a friend in life gives you a sense of connectedness, purpose and mental and physical support,’ says Dr Ghafoori. ‘Having a partner to share incomes and expenses with also potentially gives you a stronger financial outlook.’

‘Couples also have someone to talk to about retirement and make plans with,’ says Dr Mata.

‘As you transition to retirement, you no longer have your colleagues. Being connected to family and friends can help with the stressful moments because retirement might not be easy, especially in the beginning.’

The survey found migrants were more likely to be missing quality connections.

‘Our findings show that migrants have fewer social connections compared to Australians,’ says Dr Mata. ‘This is likely because family and friends are overseas, making them feel less socially integrated.’

Retirement awareness and planning

This looks at how certain a person feels about the future, and their behaviour in terms of setting goals.

Participants who set clear and specific goals scored much higher than those who didn’t.

‘When you’re planning for retirement you’re developing a set of expectations,’ says Dr Mata. ‘You’re imagining how your life will be when you stop working, and that helps you to adjust when the time comes.’

‘Planning means looking at your finances, and considering your health, your post-retirement self-identity and all aspects within your control that you can build up to create a better retirement experience,’ says Dr Ghafoori.

Those with a formal education showed higher levels of goal setting, as did homeowners – they also had fewer uncertainties about the future. So did people who were married or in a de facto relationship, retirees and those with a higher income.

They also had fewer uncertainties about the future, as did people who were married or in a de facto relationship, retirees and those with a higher income.

Migrants were less likely to plan for retirement, however, they had similar levels of financial literacy and mental and physical health as Australians – and a similar overall level of confidence.

‘People who weren’t born here may not have a strong understanding of the Australian super system,’ says Dr Mata. ‘I think it’s important to provide education in this area as even some Australians don’t fully understand how super works.’

A chart showing the 4 key factors of retirement confidence: Financial awareness and skills, health and wellbeing, social factors, and retirement awareness and planning.


The power of retirement planning

Over the past 5 years, the survey has shown an improvement in financial literacy as participants approach retirement. This suggests pre-retirees are developing skills and knowledge to better manage their money.

The results also show a significant improvement in financial anxiety during retirement.

‘You see the most significant decrease in anxiety in the retirement years,’ says Dr Mata. ‘Perhaps it’s because they’ve been planning for so long and they don’t know how it will be, then they get there and realise everything is okay and start to relax.’

Dr Ghafoori says all factors used in the index are interconnected.

‘Looking after your physical and mental health will give you a stronger resource set when you enter retirement, but equally important is understanding your financial situation and how to plan for the future,’ he says. ‘That way you can adjust a lot quicker and be prepared financially so there are no surprises.

‘When you reach 60 or 65, it’s time to sit down, have a beer and just enjoy yourself. And planning in these key areas will leave you in the best position to enjoy your retirement experience.’


Plan your retirement

This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at

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