Retirement is not the time to stop investing. For most Australians, retirement lasts 20 to 30 years. A retiree who puts everything in cash at 65 will find their purchasing power has declined significantly by the time they are 85, even if the nominal balance looks similar. The question is not whether to keep investing after retirement. The question is which investments make sense at which stage, and how to balance income, growth and stability as you age.
This guide covers the best investment options for retirees in Australia, how to think about investment mix by age, and how your super fits into the picture.
Why Staying Invested in Retirement Matters
The most common retirement investing mistake is moving too much to cash too soon. It feels safe. In practice, cash at 2% to 3% interest loses ground to inflation every year. At 3% annual inflation, $100,000 today has the purchasing power of approximately $74,000 in ten years, and $55,000 in twenty years. For a retiree who may live to 90, twenty years is entirely realistic.
The goal in retirement is not to maximise returns. It is to generate reliable income while keeping enough of the portfolio growing to offset inflation and fund spending in your 70s and 80s. Those two objectives pull in opposite directions, which is why the investment mix in retirement is more nuanced than in accumulation.
Scott and Phil covered the real-world impact of conservative versus growth portfolios over a long retirement in Episode 1 of the Wealthlab Podcast, using identical couples with identical spending but different investment mixes. The growth portfolio funded retirement decades longer. Watch Episode 1 on YouTube.
The Best Investment Options for Retirees in Australia
These are the main investment options available to Australian retirees, what each one does, and when it is most useful. None of these is a specific product recommendation. The right mix depends on your balance, income needs, risk tolerance and personal circumstances.
Please note: The information below is general in nature and does not take into account your personal financial situation, needs or objectives. Before making any investment decisions, consider whether the information is appropriate for your circumstances and seek advice from a licensed financial adviser.
Account-Based Pension Inside Super
For most Australian retirees, the account-based pension is the most tax-efficient investment structure available. Once you convert your super into pension phase (from age 60), investment earnings are tax-free. Withdrawals are tax-free. And you choose the investment option that determines your actual return.
The account-based pension is not itself an investment. It is a tax-advantaged structure inside which your money is invested in whatever option you choose: growth, balanced, conservative, index, or income-focused. The quality of the investment option inside the pension matters far more than the structure itself.
Phil made this point in Episode 22 of the Wealthlab Podcast: “A balanced fund is not a true balanced fund with most of these funds these days. They are every day of the week a growth fund that they slap the name balanced on.” Understanding what you actually hold inside your pension option, not just its label, is genuinely important. Watch Episode 22 here.
Australian Shares and ETFs
Australian shares provide two things retirees value: income through dividends and franking credits, and long-term capital growth that tends to outpace inflation over rolling ten-year periods.
The franking credit benefit is particularly valuable in retirement. For retirees with little or no other taxable income, fully franked dividends include attached tax credits that are often refunded in full through the tax return. On a $200,000 share portfolio at 4.5% dividend yield, that is approximately $9,000 in dividends plus potentially $3,000 to $4,000 in refunded franking credits each year.
The main limitation of direct shares for retirees is volatility. Share prices fluctuate, and a retiree who needs to sell shares to fund expenses during a market downturn crystallises a loss. The standard approach to managing this is keeping one to two years of spending in cash outside the share portfolio, so there is never pressure to sell during a temporary fall.
ASX-listed ETFs provide the same exposure to Australian and international shares at lower cost than most managed funds, with the additional benefit of intraday liquidity and transparent holdings.
Term Deposits and High-Interest Savings Accounts
In 2026, with the RBA cash rate elevated, term deposits and high-interest savings accounts are providing returns of 4.5% to 5.25% for the first time in years. For retirees, these provide a risk-free return with government deposit protection up to $250,000 per institution.
The role of cash in retirement is primarily stability and accessibility, not return maximisation. Keeping one to two years of spending in term deposits or a high-interest savings account provides a buffer that means you are never forced to sell growth assets at a bad time to fund daily living costs.
Beyond the cash buffer, holding large amounts in cash or term deposits carries the real risk of inflation eroding purchasing power over time, as described above. Cash is a component of a retirement portfolio, not the whole of it.
Australian REITs
ASX-listed Real Estate Investment Trusts (A-REITs) provide exposure to commercial property income without the illiquidity of direct property ownership. They distribute the majority of rental income to unitholders, providing regular cash distributions. They are fully liquid, available on the ASX, and require no property management.
A-REITs typically yield 4% to 6% in distributions. They are more correlated to equity markets than direct property and can be more volatile in rising interest rate environments. They are an income-focused option suitable for part of a retiree’s portfolio, not a core holding.
Government and Corporate Bonds
Bonds provide predictable income and typically hold their value better than shares during equity market downturns. Australian government bonds are extremely low-risk; corporate bonds carry varying levels of credit risk depending on the issuer.
Bond-focused ETFs or managed funds make bond exposure accessible without the complexity of buying individual bonds. In a balanced retirement portfolio, bonds and fixed interest typically play a defensive role, smoothing out the volatility of the growth portion.
Direct Investment Property
Investment property can provide rental income and capital growth over time, but for retirees it comes with real considerations: it is illiquid, requires ongoing management, and as an assessable asset it directly affects Age Pension eligibility. Many Australians who hold investment property into retirement find it complicates their pension position significantly.
For retirees looking to maintain property exposure without the management and liquidity issues, A-REITs provide similar income with far more flexibility. property securities funds provide the income and diversification benefits of property exposure without the management complexity yielding 4–6% in distributions and listed on the ASX for daily liquidity.
Best Retirement Investment Portfolio by Age
Investment needs change through retirement. A 65-year-old with 25 years of potential retirement ahead has very different needs from a 75-year-old or an 85-year-old. The following are general illustrative approaches, not specific recommendations. Your appropriate mix depends on your personal circumstances.
| Age range | General investment focus | Illustrative mix | Primary goal |
|---|---|---|---|
| 60 to 65 | Growth with income | 50 to 60% growth assets, 40 to 50% defensive | Beat inflation, build long-term runway |
| 65 to 75 | Balanced income and growth | 40 to 50% growth assets, 50 to 60% defensive | Reliable income, moderate growth |
| 75 to 85 | Income and capital preservation | 25 to 40% growth assets, 60 to 75% defensive | Stable income, protect capital |
| 85 and over | Capital preservation and simplicity | 20 to 30% growth assets, 70 to 80% defensive | Cover expenses, simplify management |
These are general illustrations only. A 65-year-old with a large balance, good health and no near-term liquidity needs might comfortably hold more growth assets than the table suggests. A 65-year-old with a small balance and significant healthcare costs might need a more conservative mix. The ranges are starting points for a conversation, not instructions.
Best Investment for a 65 Year Old in Australia
At 65, most Australians have two years until the Age Pension starts and potentially 25 to 30 years of retirement ahead. The investment priorities at this age are generating reliable income while keeping enough growth exposure to outpace inflation over the long run.
A balanced approach with 45% to 55% in growth assets (Australian and international shares, property, infrastructure) and the remainder in defensive assets (cash, bonds, fixed interest) reflects the income and growth trade-off that suits many 65-year-olds. Keeping one to two years of spending in cash or term deposits protects against sequence-of-returns risk: the impact of a market fall in the early years of retirement when the balance is at its highest.
The account-based pension inside super remains the most tax-efficient structure at 65, with zero tax on earnings and withdrawals.
Best Investment for a 70 Year Old in Australia
At 70, the Age Pension has been supplementing income for three years and spending priorities are often shifting. Healthcare costs are starting to increase. The investment mix at 70 generally tilts more defensive than at 65, but not dramatically so. A 40% to 50% growth allocation remains appropriate for many retirees who are in good health and not drawing heavily from their portfolio.
The key change from 65 is that the investment horizon is somewhat shorter and the income certainty objective becomes more prominent. Reducing share exposure in favour of dividend-focused holdings, bonds and fixed interest reduces volatility without fully sacrificing growth.
How Often to Review Your Super Pension Strategy
The “how often should I review my super pension strategy” query appearing in this post’s GSC data is worth answering directly. Annual is the right cadence for most retirees. The review should cover: whether your drawdown rate is sustainable at current investment returns, whether your investment option still reflects your risk tolerance and time horizon, whether your Age Pension entitlements have changed due to balance movements, and whether any large upcoming expenses (healthcare, travel, home maintenance) require portfolio adjustments.
More frequent reviews are appropriate after significant market movements or major personal circumstances changes (health events, relationship changes, moving into aged care).
Best Investment for a 75 Year Old in Australia
At 75, the portfolio is generally simpler, more income-focused, and more heavily weighted toward defensive assets. A 75-year-old with a $400,000 balance might hold 25% to 35% in growth assets and the remainder in income-producing defensive assets, with several years of spending in cash or term deposits.
The growth allocation at 75 is not about maximising long-term returns. It is about keeping the real value of the portfolio from eroding too quickly over the remaining 10 to 20 years. Even a modest 25% to 30% allocation to shares provides meaningful inflation protection that pure cash or bonds cannot.
Healthcare costs and aged care planning become more prominent at this age. Maintaining liquidity and avoiding illiquid investments such as direct property or unlisted assets is generally more important at 75 than at 65.
How the Age Pension Interacts with Your Investments
Investment assets outside super and inside an account-based pension are all assessed under the Age Pension means tests. How your assets are structured affects your entitlements.
The assets test thresholds for a single homeowner from 20 March 2026:
- Full pension: assets below $321,500
- Part pension cut-off: assets above $722,000
The income test uses deeming rates to assess financial assets regardless of actual returns: 1.25% on the first $64,200 for singles ($106,200 for couples) and 3.25% above those thresholds, as at May 2026.
This means investment choices can affect Age Pension entitlements. Moving assets into higher-yielding investments does not increase Centrelink’s income assessment (since deeming applies regardless of actual returns), but higher asset balances do affect entitlements under the assets test.
Phil and Dan covered how the assets test and income test interact in practice with real case studies in Episode 10 of the Wealthlab Podcast. Watch Episode 10 here.
Our pension and Centrelink page covers the full means test rules.
FAQ: Best Investments for Retirees in Australia
What is the best investment after retirement in Australia? There is no single best investment. Most retirees benefit from a combination of an account-based pension inside super (for tax-free earnings), Australian shares or ETFs (for income via dividends and franking credits), and cash or term deposits (for stability and a buffer against market downturns). The right mix depends on your balance, age, income needs and risk tolerance.
What is the best investment strategy for retirees? Balancing income generation with inflation protection while maintaining a cash buffer of one to two years of spending. The strategy shifts over time as you age, with a gradual move from growth-oriented to income-oriented to capital preservation-focused as retirement progresses. Annual reviews keep the strategy aligned with your actual needs and market conditions.
What is the best retirement portfolio for a 65 year old? A broadly balanced approach with 45% to 55% growth assets and the remainder in defensive assets suits many healthy 65-year-olds with a 25-year retirement horizon. Keeping one to two years of spending in cash protects against early-retirement sequence risk. Individual circumstances determine the appropriate mix.
What is the best investment for a 70 year old in Australia? At 70, a 40% to 50% growth allocation alongside income-focused defensive assets suits many retirees in good health. The emphasis shifts more toward reliable income and less toward maximising long-term growth compared to age 65. Healthcare cost provisions become more important in the portfolio structure.
What is the best investment for a 75 year old in Australia? A more defensive allocation of 25% to 35% growth assets and the remainder in income-producing defensive assets reflects the shorter investment horizon and greater income certainty needs at 75. Maintaining some growth exposure remains important for inflation protection even at this age.
How often should I review my super pension strategy? Annually at minimum. Reviews should cover drawdown sustainability, investment option appropriateness, Age Pension entitlement changes and any upcoming large expenses. More frequent reviews are appropriate after significant market movements or major personal circumstances changes.
Does staying invested affect my Age Pension? Investment assets are assessed under the Age Pension means tests. The assets test is based on total asset value; the income test uses deeming rates regardless of actual returns. Investment strategy choices can affect how your assets sit relative to the means test thresholds.
What to Do Next
Investment decisions in retirement are not about maximising returns. They are about generating reliable income while protecting your purchasing power over a potentially very long retirement. Getting the mix right, reviewing it annually, and understanding how investments interact with the Age Pension makes a material difference to how comfortable and financially secure your retirement is.
Take the free Wealthlab retirement quiz for a general read on your retirement position. Or book a free, no-pressure chat with the Wealthlab team to talk through what investment approach makes sense for your specific age, balance and retirement goals.
