When you finally reach retirement, it’s natural to wonder:“Should I keep investing after retirement, or is it time to play it safe?”It’s a smart question because retirement isn’t the end of your financial journey. In many ways, it’s the beginning of a new phase of wealth management.While your working years are about building wealth, your retirement years are about preserving and growing it enough to last the rest of your life.
So yes, for most Australians, keeping some level of investment after retirement is not only smart it’s essential. Let’s explore why, how, and what to consider.
Why You Should Keep Investing After Retirement
The biggest risk in retirement isn’t a market downturn it’s running out of money too soon.This is known as longevity risk, and one of the best ways to reduce it is by continuing to invest strategically after you stop working.
Here’s why it matters:
1. You Could Live 25–30 Years in Retirement
Australians are living longer than ever. A 65-year-old today can expect to live well into their 80s or 90s.
That means your savings may need to last 25–30 years and leaving all your money in cash might not keep up with inflation.
2. Inflation Erodes Purchasing Power
If you stop investing entirely, inflation gradually eats away at the value of your money.
Even with a modest inflation rate of 3%, prices could double in about 24 years.
Example:
A $5 coffee today could cost $10 by the time you’re 85.
That’s why maintaining some growth investments like shares or managed funds helps your money grow faster than inflation.
3. Superannuation Is Already an Investment
When you retire and move your super into an account-based pension, your money usually stays invested.
The difference is, you start drawing regular income from it while it continues to grow in the background tax-free if you’re over 60.
So even if you think you’ve stopped investing, your super is likely still working for you.
The Right Way to Invest After Retirement
You don’t need to take big risks. Instead, focus on balance, diversification, and cash flow.Here’s how to structure your retirement investments wisely:
1. Keep a Mix of Growth and Defensive Assets
Diversification is key. A good retirement portfolio typically includes:
- Defensive assets like cash and bonds (for stability and short-term needs)
- Growth assets like shares or property (for long-term returns)
This balance helps you enjoy steady income while still protecting your money against inflation.
Example:
A retiree might hold:
- 40% in shares or ETFs
- 30% in fixed interest and bonds
- 20% in cash or term deposits
- 10% in property or infrastructure funds
The exact mix depends on your risk tolerance and goals.
How to Estimate How Long My Retirement Savings Will Last
2. Use an Account-Based Pension
If you’ve reached preservation age (usually 60), you can convert your super into an account-based pension.
This gives you:
- Regular income payments (you choose how much)
- Ongoing tax-free investment earnings
- Access to flexible withdrawal options
Your balance continues to grow based on market performance meaning your nest egg keeps working for you even as you draw from it.
3. Invest for Income, Not Just Growth
In retirement, your focus shifts from accumulating wealth to generating steady income.
Popular income investments include:
- Dividend-paying Australian shares
- Exchange-Traded Funds (ETFs)
- Managed funds and index funds
- Government and corporate bonds
- Real estate investment trusts (REITs)
These can provide a mix of income and capital growth, helping you fund daily expenses without selling too many assets.
4. Keep a Cash Buffer
Even if you invest, always keep 1–2 years of expenses in cash or term deposits.
This gives you peace of mind and prevents you from selling investments during market downturns.
5. Review Your Portfolio Annually
Retirement investing isn’t “set and forget.” Review your portfolio at least once a year to:
- Rebalance asset allocations
- Adjust for market changes
- Ensure your withdrawals remain sustainable
A financial adviser can help you monitor performance and rebalance when needed.
When You Might Choose to Stop Investing
There are times when selling down or simplifying investments makes sense especially later in retirement.
You might choose to stop investing if:
- You need to fund aged care or medical expenses
- You want to gift money to family
- You prefer certainty over market fluctuations
- Your income needs are fully met through pension and super
The key is to transition gradually, not all at once.
FAQs:
1. Should retirees keep their money in the share market?
Yes, in moderation. Shares help your money grow and keep up with inflation, but balance them with safer assets like cash or bonds.
2. Is investing risky after retirement?
All investing carries risk, but the right diversification can limit losses while preserving returns. Avoid overexposure to one asset class.
3. Can I lose my super if the market drops?
Your super remains invested, so it can fluctuate. However, diversified investment options and regular reviews help manage this risk.
4. What’s the best investment option for retirees?
A mix of income-generating investments (like dividends, bonds, and ETFs) and defensive assets offers stability and growth.
5. How do I know if I’m investing too aggressively?
If short-term losses make you anxious or you rely heavily on your investments for income, it may be time to shift to a more conservative mix.
The Bottom Line
So, should you keep investing after retirement?
For most Australians yes. Staying invested helps your money last longer, beat inflation, and support a comfortable lifestyle well into your later years.
The key is balance:
- Keep enough cash for short-term needs
- Stay diversified across growth and defensive assets
- Review your plan regularly
At Wealthlab, we help retirees manage their super, investments, and income strategies to ensure their money keeps working even after they’ve stopped working.
Book a free consultation today to discover how to invest confidently after retirement and secure your financial future.
Learn More About Retirement & Superannuation
https://moneysmart.gov.au/retirement-income-sources
https://moneysmart.gov.au/manage-your-money-in-retirement/make-your-money-last-in-retirement