When people think about retirement risk, they usually focus on running out of money.
But there’s another risk that often goes unspoken – regret risk.
Regret risk is the fear of making a financial decision today that you might wish tomorrow you hadn’t made. For many Australians approaching or living in retirement, that fear quietly shapes how and when they spend.
Why spending feels so hard
For decades, saving for retirement has been the goal for many Australians. Contribute regularly into super. Build a safety net. Watching your balance grow overall feels reassuring. It represents discipline, security and progress.
Retirement changes that dynamic. Instead of saving, you begin drawing on it. Even when withdrawals are part of a well-designed plan, seeing your balance fall can feel uncomfortable.
Even retirees with healthy balances often hesitate. Some delay travel. Others postpone lifestyle plans. It’s not always about affordability – it’s about fear of getting it wrong and running out of money in the long run.
The psychology of regret
We tend to feel the pain of losses more strongly than the satisfaction of gains. In retirement, this can mean treating every dollar spent as something lost, rather than money intentionally used to support your lifestyle.
When decisions feel permanent or difficult to reverse, hesitation usually increases. Doing nothing can feel safer than committing to a strategy that feels uncertain.
But there’s another side to regret.
Over time, consistent underspending can lead to ongoing delay of plans and missed experiences. Retirement planning isn’t just about preserving capital – it’s about making the most of the years ahead.
Building confidence through structure
Spending confidence in retirement doesn’t come from hope. It often comes from having the right structure in place.
For many retirees, incorporating an investment-linked life income product (also known as an annuity) as part of a broader strategy can provide some assurance. It can help by:
Life income products may also help some retirees gain or increase Age Pension entitlements through discounted asset test treatment.
This matters. Around one third of Age Pension recipients apply at least a year later than they could have, missing out on an average of $16,800 over 12 months1. Often, it’s not reluctance – it’s uncertainty about eligibility and how assets are assessed.
Even a modest Age Pension payment can unlock valuable concessions, from healthcare to utility discounts, easing pressure of everyday expenses.
When combined with an account-based pension, an investment-linked life income product can create balance – offering long-term certainty of income alongside flexibility and access to capital for discretionary spending.
A clear structure doesn’t just help protect you from regret risk– it can clarify what financial decisions are available.
Retirement should be lived, not watched
Retirement isn’t about watching your savings balance. It’s about embracing the life you’ve worked hard for, focusing on what matters most in retirement – like spending time with family, pursuing passions, travelling and saying yes to meaningful experiences.
A well-structured income strategy can reduce the fear of spending too much and the regret of missing out.
Seeking professional financial advice can help you design a retirement income plan tailored to your needs, giving you clarity about what you can spend and confidence about the years ahead.
Because retirement should offer confidence to be comfortable – a celebration of a milestone and more room to say yes.
