As the year gradually draws to a close, many Australians will spend time catching up with family and friends over the holiday season. But this year, those gatherings could feel a little different. With the rising cost of groceries, energy, insurance and everyday essentials, many clients may find themselves looking more closely than usual at what they are spending and what lies ahead. For clients, these moments often surface something important: life rarely unfolds exactly as planned. 

Key points

• Rising living costs are reshaping clients’ retirement needs and expectations.
  
• Retirement plans need flexibility as spending, family and health circumstances evolve
• Regular reviews can help ensure retirement strategies remain aligned with changing needs.
• Resilient strategies can help clients prepare for rising costs and unexpected expenses.
• Lifetime income products can provide greater certainty as markets and circumstances change.
  
  
  
• For financial advisers, this shift in mindset matters. When clients start paying closer attention to costs, they often begin to question whether their retirement strategy is equipped to absorb what comes next. The question for advisers is whether the strategies built around earlier assumptions and discussions will remain appropriate as market conditions, living costs and client circumstances continue to evolve.
  

Changing spending needs

When discussing retirement risks, the conversation often centres on investment markets, inflation and longevity. These are important considerations however, one of the most overlooked is the possibility that future spending needs may look very different to what was originally anticipated.

This is becoming more tangible. According to the ABS Selected Living Cost Indexes , living costs across Australian households rose between 3.7% and 4.7% in the twelve months to June 2026, a sustained period of pressure that has compounded over recent years. While markets have experienced periods of recovery, day-to-day expenses remain significantly higher than they were only a few years ago.

As a result, clients are increasingly focused on affordability. The concern is not always whether they have enough, it is whether their current spending patterns remain sustainable if costs continue to rise or circumstances change unexpectedly.

The conversations that occur over summer often prompt clients to reflect on their broader financial position. Some may spend time with ageing parents and begin thinking differently about their own future needs. Others may see children struggling with higher mortgage repayments and wonder whether financial assistance may be required. Many will simply recognise that their cost of living has increased more than expected.

These moments create an opportunity to revisit assumptions that may have been embedded in a retirement plan years earlier. Rather than focusing solely on investment performance or projected account balances, advisers can help clients explore wider questions to ensure the strategy is aligned to their changing needs:

• What expenses would be most difficult to absorb?
• How much flexibility exists within their retirement plan?
• Are current spending assumptions still realistic?
• How would changing circumstances affect their goals?

Building a more resilient retirement strategy

Helping clients prepare for an uncertain future involves building a strategy that can adapt to a range of circumstances. This may include maintaining appropriate liquidity, regularly reviewing spending assumptions, considering the interaction between investments and social security entitlements, and ensuring estate planning arrangements remain current. It may also include revisiting how different components of a client's portfolio contribute to achieving specific objectives throughout retirement.

Importantly, advisers can help clients distinguish between concerns that require immediate action and those that simply warrant ongoing monitoring. It is about ensuring clients feel better equipped to navigate change when it occurs.

For clients particularly concerned about meeting ongoing expenses as costs continue to rise, incorporating a lifetime income stream such as Allianz Guaranteed Income for Life (AGILE) into the broader strategy can provide an additional layer of certainty, creating a source of income that continues regardless of how markets or circumstances evolve.

Meaningful client conversations at year-end

As clients reflect on the year that was and what lies ahead, advisers have an opportunity to revisit a fundamental question:

If your client's circumstances changed tomorrow, would their retirement strategy still be fit for purpose?

The holiday season often highlights the realities of rising living costs, changing family dynamics, health considerations and evolving priorities. These conversations provide a natural catalyst to review not only investment strategies, estate planning arrangements and long-term goals, but also the assumptions underpinning a client's retirement plan. 

For some clients, the challenge might not be a lack of assets. It is understanding how those assets can continue to support changing needs throughout retirement. 

Advisers are uniquely positioned to help clients prepare for what comes next whether the conversation centres on affordability, family support, healthcare costs, housing decisions or future care needs. It's about building a strategy that remains resilient, flexible and aligned to their goals, even as life continues to evolve.

References

1.  Australian Bureau of Statistics 2026, Selected Living Cost Indexes, Australia, ABS.

This material is issued by Allianz Australia Life Insurance Limited, ABN 27 076 033 782, AFSL 296559 (Allianz Retire+). Allianz Retire+ is a registered business name of Allianz Australia Life Insurance Limited. This information is current as at October 2026 unless otherwise specified and is for general information purposes only. This information has been prepared specifically for authorised financial advisers in Australia and is not intended for retail investors. It does not take account of any person’s objectives, financial situation or needs. Before acting on anything contained in this material, you should consider the appropriateness of the information received, having regard to your objectives, financial situation and needs. The returns on Allianz Guaranteed Income for Life (AGILE) and AGILE Super+ are subject to a number of variables including investor elections, market performance and other external factors, and may differ from the information contained herein. Past performance is not a reliable indicator of future performance. No person should rely on the content of this material or act on the basis of anything stated in this material. Allianz Retire+ and its related entities, agents or employees do not accept any liability for any loss arising whether directly or indirectly from any use of this material. Use of the word ‘guarantee’ in this material refers to an assurance that certain conditions or contractual promises will be fulfilled by Allianz Retire+ from the available assets of its Statutory Fund No 2, in relation to the product terms. This includes ‘guaranteed’ income payments in the Lifetime Income Phase which will be paid from the available assets of Statutory Fund No 2, noting that Allianz Retire+ may terminate the product in certain limited circumstances as outlined in the Product Disclosure Statement referred below. Allianz Australia Life Insurance Limited is the issuer of AGILE and AGILE Super+. Prior to making an investment decision, investors should consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) which are available on our website (www.allianzretireplus.com.au).