According to a new Vanguard study, tailoring your retirement strategy based on your personal and household financial data could potentially increase the value of your projected income in retirement by anywhere from 3% to as much as 50%.

Traditionally, many retirees follow a minimum withdrawal strategy, taking out only the legislated minimum from their retirement accounts. It’s simple, but it doesn’t consider the full financial picture. Vanguard’s research shows that this approach could be leaving serious money on the table.

By contrast, strategies that incorporate more personal data – like whether you have a partner, your eligibility for the Age Pension, or assets held outside super – can dramatically improve retirement spending outcomes.

Who benefits most?

The study highlights a key challenge: while individuals have access to their own financial details, they often lack the expertise to use them effectively. That’s where professional advisers can come in. With the right tools and know-how, advisers can unlock the full potential of a retiree’s financial situation.

And what about those who don’t currently have an adviser? The Vanguard research found that while superannuation funds could help – they’re currently limited in how much personal data they can access and apply at scale.

Three strategies compared

Vanguard modelled three retirement income strategies:

Minimum withdrawal strategy: The retiree withdraws and spends only the legal minimum, regardless of their financial situation.
Super fund best efforts strategy: A hypothetical super fund offers guidance based on limited member data - missing key details like partner status or external assets.
Full information strategy: A fully optimised plan that uses comprehensive personal and household data.

Key findings

The more complex your financial situation, the more you stand to gain from a personalised strategy:

Super fund best efforts strategy: As the complexity in financial situations increased, the super fund best efforts strategy increased the value of projected annual retirement incomes by 3% to 34% compared to the minimum withdrawal strategy.
Full information strategy: As the complexity in financial situations increased, the full information strategy increased the value of projected annual retirement incomes by 3% to 51% compared to the minimum withdrawal strategy.

Vanguard Australia’s Head of Financial Adviser Services, Rachel White, says the study underscores the importance of personal information in optimising retirement income strategies.

“The study shows that the more personal and household information incorporated into a retirement income strategy, the greater the potential financial benefits. This underscores the critical role personalised financial advice plays in improving retirement outcomes, particularly as financial complexity increases,” said Ms White.

“Comprehensive personalised advice, which combines financial acumen with a person’s full financial picture, is undoubtedly the gold standard. Unfortunately, the cost of comprehensive personalised advice and a shortage of advisers make it hard for people to access this level of advice.”

Ms White says given Australia’s growing retirement needs and the potential value advisers can bring to retirement planning, there is a need for settings that encourage a greater supply of advisers in the market.

“Not everyone, however, needs that level of advice, and our research shows that even the consideration of limited personal information and broad assumptions - as in the case of the hypothetical super funds best efforts strategy - can already lead to improved outcomes. And that’s a great reminder to make sure you’re engaging with your super fund and making the most of the information and services they provide,” said Ms White.

“But the study shows that for people with more complex financial situations, there is a substantial gap in potential retirement outcomes compared to when the full information strategy is used. We think more can be done to close this gap.”

Ms White said Vanguard advocates for policy settings and industry practices that allows accessibility to the broad spectrum of guidance and advice to improve financial and retirement outcomes for Australians – from comprehensive personalised advice, to simple personalised guidance, to general information and education.

“The benefits of a more personalised approach are clear from a financial standpoint, but the emotional and behavioural benefits that come from having a personalised plan, and the confidence that brings, are also important.

23 JULY 2025
Vanguard
vanguard.com.au