Don’t You Deserve More Certainty When You Retire?


Retirement is one of the biggest changes you’ll undergo in your life. It’s up there with choosing a spouse, having kids, buying a house, and taking on a mortgage. The more certainty you have as you reach the end of your long working life, the better – especially regarding your finances.

When you’re no longer part of the workforce, confidence in your income and financial health can be harder to find. You’re in excellent company though.

Millions of retirees:

The Australian Bureau of Statistics (ABS) estimates there are already 4.1 million retirees in Australia. In 2020, 140,000 people retired, with an average age of 64.3 years. This is roughly a year later than we downed tools in 2018-19. 

According to the article Why Australians are working longer and retiring later, appearing in Forbes magazine in December 2023, it’s not by choice: “exiting the workforce is becoming less realistic or appealing for many Australians — due to financial and lifestyle factors. As a result, many of us are working for longer and retiring later.”

Too scared of inflation to retire:

One of the biggest concerns for retiring Australians is knowing whether they have enough money to enjoy their retirement. 

The 2023 Global Retirement Reality Report found that these concerns are on the rise. Around half of working Australians are concerned about having enough money to retire – and to live on once they’re no longer working. The report revealed that:

  • Only 20% of Australians believed they’d have sufficient funds for retirement;
  • 14% expressed doubts about ever achieving financial security; and 
  • 46% lacked confidence in their financial preparedness for retirement. 

Compared to responses from 2022, all indicators showed a worsening trend, with a 10% increase in those uncertain about whether they could even afford to retire at all.

Many listed inflation as one of their biggest concerns, along with the cost of living, housing expenses, and medical costs.

How inflation impacts your retirement savings:

Last December, YourLifeChoices reported on the wealth-destroying impact of inflation. This found that inflation can erode your retirement savings over time, impacting your purchasing power and your retirement lifestyle. For example, $100,000 held in assets or income in 1980, will significantly diminish in value over time due to inflation. 

To put it another way, if $100,000 cash was kept in a safe from 1980 and left untouched until today, it would still amount to $100,000, but its purchasing power would have dwindled to just $19,000 in today’s terms. This erosion of purchasing power by inflation amounts to an 81% loss over time – if not protected against:

  • $100,000 cash in 1990 would now have a purchasing power of $43,000. 
  • $100,000 from 2000 would equate to $54,000 today.
  • $100,000 from 2010 has eroded to a purchasing power of $73,000 today.

In the past two years alone, $100,000 from the beginning of 2020 has already lost 9% of its purchasing power, now amounting to $91,000. Even if inflation remains within the Reserve Bank of Australia’s target range of 2-3%, money still loses half of its purchasing power over 30 years without investments that keep pace with inflation.

Inflation-proof your retirement:

Concerns about inflation are part of the reason why Hostplus, one of the largest super funds in Australia with approximately $110 billion in funds under management, offers retirees an investment product which sets returns in advance at a rate above inflation. 

It’s called CPIplus and it’s “designed to generate returns that exceed the level of inflation (as measured by the Consumer Price Index or CPI).” This flexible retirement investment option aims to reduce the risk of negative returns and is designed to give you more certainty over your returns in retirement. 

CPIplus is an innovative pension investment option that seeks to deliver several benefits:

  • Returns set above inflation:
    With returns set at 2% above inflation for the period of 1 July 2023 to 30 June 2024, the product aims to provide confidence and stability in your retirement.

  • Flexibility to move your funds:
    You’re free to access your funds whenever you need, easily switching investment options as your financial needs evolve.

  • Protection from negative returns:
    CPIplus has its lower limit set at zero per cent. This ensures you’re protected from negative returns.

CPIplus is designed to offer a reliable and secure investment option, aiming to deliver consistent returns above inflation.

In a world filled with uncertainty, having confidence in your retirement finances is an advantage. 

If you’re retired, or retiring soon and you’re looking for a low-risk investment – with greater certainty that your returns in retirement will stay above inflation – then take a look at CPIplus today.


Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance.

Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Issued by Hostplus Proprietary Limited. General advice only. Past performance is not a reliable indicator of future performance. Consider your circumstances and the Hostplus Pension PDS and TMD at before making a decision. Though returns above inflation are predetermined annually, Hostplus may adjust the rate of return with at least 30 days’ notice.

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