September
2026 market update: what matters for retirement planning

Australian shares continued to rise through August, but stronger
markets do not remove the need for discipline. Interest rates remain
restrictive, inflation is still relevant to household budgets, and
geopolitical uncertainty continues to affect oil, currencies and
defensive assets such as gold.

For people approaching or living in retirement, the practical
question is not whether the next market move can be predicted. It is
whether their financial plan has enough structure to withstand a range
of outcomes.

The August market picture

The ASX 200 recorded another positive month in August. At the same
time, market valuations remained elevated by historical standards.

An index tells us where capital has already moved; it does not tell
us with certainty what comes next. When markets are strong, it can be
tempting to increase risk simply because recent returns have been
favourable. A more considered response is to review whether the
portfolio still reflects its intended asset allocation, time horizon and
income needs. Acquira’s investment
philosophy explains the role of structure and evidence in that
process.

Interest rates and inflation also remained important. The Reserve
Bank of Australia held the cash rate at its August meeting, while
headline inflation had moderated but remained above the midpoint of the
RBA’s target range.

What higher
interest rates can mean in retirement

Higher rates can create both benefits and pressures. Cash accounts
and term deposits may offer more income than they did when rates were
lower, but borrowers face higher repayments. Businesses and property
investors may also experience increased financing costs, which can
eventually affect company earnings, asset values and household
spending.

For a retiree, the headline cash rate is only one part of the
picture. The more useful review is whether reliable income from
pensions, cash, term deposits and other sources is sufficient to meet
planned spending without taking unnecessary investment risk.

Why inflation
still matters after retirement

Inflation reduces what a fixed amount of money can buy. Even moderate
inflation can have a material cumulative effect over a retirement that
may last 20 or 30 years. Some expenses—including health care, insurance,
home maintenance and energy—can also rise at a different rate from the
published consumer price index.

A retirement-income plan therefore needs to consider both current
cash flow and the likelihood that spending will change over time. Assets
with growth potential may help protect long-term purchasing power, while
cash and defensive investments support nearer-term stability. The
balance between them will depend on the individual.

For retirees and pre-retirees, these conditions can affect:

• the interest earned on cash and term deposits;
• mortgage and investment-loan repayments;
• the real purchasing power of retirement income;
• the relative appeal of growth and defensive assets; and
• the sustainability of planned pension withdrawals.

Why gold and oil remain in
focus

Gold traded near record Australian-dollar levels during the period,
reflecting continued concern about government debt, currencies and
geopolitical risk. Oil prices also remained sensitive to developments in
the Middle East.

These movements are a reminder that diversification has different
purposes. Growth assets support long-term capital growth, while cash and
defensive assets can provide liquidity and help reduce the need to sell
growth investments during a downturn.

That does not mean an asset should be purchased simply because it has
recently performed well. Any allocation should be considered in the
context of the whole portfolio, including its role, risks, costs and
expected holding period.

How franking
credits can support retirement income

Australian companies may attach franking credits to dividends to
reflect company tax already paid. The shareholder includes both the cash
dividend and the franking credit in assessable income, then may claim
the credit as a tax offset.

Where an investor’s tax liability is lower than the available
franking credits, eligible excess credits may be refundable. This can
increase the after-tax income produced by Australian shares in some
retirement structures.

A simple franking-credit
example

Suppose an Australian company earns $100 of profit and pays $30 in
company tax. If it distributes the remaining $70 as a fully franked
dividend, the shareholder may receive a $70 cash dividend and a $30
franking credit. For tax purposes, the grossed-up income is $100, with
the $30 credit available as a tax offset, subject to the shareholder
meeting the relevant rules.

The final outcome depends on the shareholder’s taxable income,
marginal tax rate, ownership period and eligibility. The example
explains the mechanism only; it is not an estimate of the return from a
particular investment.

Franking credits should not, however, be the sole reason to own a
company or concentrate a portfolio in Australian shares. Investment
quality, diversification, valuation and the investor’s personal tax
position remain important.

For more detail, see the Australian
Taxation Office’s guidance on franking credits.

Four
retirement-planning matters worth reviewing

1. Your transfer balance cap

The transfer balance cap limits the amount that can be transferred
into the tax-free retirement phase of superannuation. The general cap is
indexed over time, while an individual’s personal cap can differ
depending on their history.

Even if a super balance is below the general cap, it can still be
useful to understand how future contributions, pension commencements and
indexation may affect the available amount. The ATO provides current
information about the transfer
balance cap. Acquira also provides superannuation
advice on the Gold Coast for people considering how these rules fit
within a broader strategy.

The transfer balance cap does not limit how much can remain in super
overall. Amounts that cannot be held in retirement phase may remain in
an accumulation account, where investment earnings are generally taxed
under the rules applying to that environment. Starting, stopping or
restructuring pensions can have reporting and tax consequences, so
records of earlier pension activity matter.

2. Your
superannuation death-benefit nomination

A valid binding death-benefit nomination can direct a super fund
trustee to pay a death benefit to nominated eligible beneficiaries. A
non-binding nomination generally guides the trustee but does not bind
its decision.

Rules differ between funds, and nominations may lapse or become
invalid. Check the fund’s requirements and consider how the nomination
works alongside a Will and broader estate plan.

Superannuation does not automatically form part of an estate. The
identity of the nominated beneficiary, whether that person is eligible
under super law, and whether benefits are paid directly or through the
estate can affect control, timing and tax. Legal and financial advice
may both be needed where family structures or intended beneficiaries are
complex.

3. Your enduring power of
attorney

An enduring power of attorney determines who can make specified
financial and legal decisions if you lose decision-making capacity. It
should be reviewed after major changes in family circumstances, health,
residence or financial arrangements.

Estate-planning documents involve legal issues, so obtain legal
advice about whether existing documents remain appropriate.

4. Contribution rules later
in life

Super contribution rules depend on age, contribution type and timing.
The work test is no longer a general requirement for every voluntary
contribution after age 65, although it can still apply when claiming a
deduction for certain personal contributions. Age limits and other
eligibility rules also apply.

Before contributing, check the current ATO
guidance on contributions by age and consider the contribution caps,
tax consequences and access rules.

It is also important to distinguish between contribution types.
Concessional, non-concessional, spouse, employer and downsizer
contributions can have different eligibility conditions and cap
treatment. A contribution made shortly before a deadline may also be
counted when the fund receives it, not when the payment was
initiated.

Property decisions
require current numbers

Property conditions can vary considerably by suburb, dwelling type
and price range. A quieter market may give buyers more negotiating room,
but it can also mean a longer selling period.

If you own an investment property, review whether the expected return
remains reasonable after allowing for current interest rates, rent,
vacancy, insurance, maintenance, tax and transaction costs.

If you are considering downsizing, timing the sale and purchase is
only one part of the decision. Eligible Australians aged 55 or older may
be able to make a downsizer contribution to super from the proceeds of
selling a qualifying home. Conditions and time limits apply. The ATO
explains the current downsizer
contribution rules.

Questions to consider
before downsizing

The financial outcome depends on more than the sale price.
Consider:

• selling, buying and moving costs;
• whether the replacement home is suitable for later-life needs;
• the effect of released capital on Centrelink means testing;
• whether a downsizer contribution supports the wider super
  strategy;
• the timing difference between settlement, contribution deadlines and
  the next home purchase; and
• the emotional and practical value of location, community and family
  access.

A smaller home does not always produce a large cash surplus,
particularly when moving into a more desirable or accessible location.
Modelling the complete transaction can provide more clarity than
focusing on the property’s headline value.

A cash reserve is part of
the plan

A retirement cash reserve can help meet near-term spending needs
without forcing the sale of growth assets after a market fall. It is one
component of a broader retirement-planning
strategy and may make it easier to remain disciplined when headlines
are unsettled.

The appropriate reserve is personal. Holding too little can create
sequencing and liquidity risk; holding too much for too long can reduce
expected returns and expose more of the portfolio to inflation. The
amount should be linked to planned expenditure, reliable income sources,
investment time frames and capacity for risk.

What is sequence-of-returns
risk?

Sequence-of-returns risk is the risk that poor investment returns
occur early in retirement while withdrawals are being made. Selling
assets after a fall can lock in losses and leave less capital available
to participate in a later recovery. Two retirees can experience the same
average return over time but have different outcomes because the returns
occurred in a different order.

A cash reserve is one way of managing this risk, but it is not the
only one. Other considerations can include diversification, withdrawal
flexibility, reliable income sources, portfolio rebalancing and the
proportion held in defensive assets.

How should a
retirement cash reserve be reviewed?

Rather than selecting an arbitrary number of years, a review can
begin with the expenses the reserve is intended to cover. Useful
questions include:

• Which essential expenses are not covered by reliable income?
• Are any major one-off costs expected in the next few years?
• How flexible is discretionary spending after a market fall?
• What assets could be sold or rebalanced in normal markets?
• How will the reserve be replenished after it is used?

The reserve should be reviewed as spending, pensions, interest rates
and market conditions change.

Frequently asked questions

Should
retirees change their portfolio when interest rates are on hold?

Not solely because the RBA has held or changed the cash rate. A
portfolio review should consider the individual’s income needs, asset
allocation, liabilities, time horizon and capacity for loss. A single
rate decision rarely provides enough information to justify a major
change.

Are franking credits
tax-free income?

No. Franking credits form part of the tax calculation. The cash
dividend and attached credit are generally included in assessable
income, and the credit may then be used as a tax offset. Whether an
excess credit is refundable depends on eligibility and the investor’s
circumstances.

How much cash should a
retiree keep?

There is no universal amount. The appropriate reserve depends on
essential spending, reliable income, foreseeable large expenses,
withdrawal flexibility, portfolio risk and personal comfort. Too little
cash can increase the risk of selling after a downturn; too much may
weaken long-term purchasing power.

Can
a downsizer contribution be made in addition to other super
contributions?

Potentially. Downsizer contributions have their own eligibility rules
and do not count towards the usual non-concessional contribution cap,
but they can affect the total amount held in super and do not bypass the
transfer balance cap. Current rules and personal consequences should be
checked before acting.

When should a
retirement strategy be reviewed?

A regular review is useful, but a review may also be appropriate
after retirement, a significant market movement, the sale of a property,
a change in health or family circumstances, the death of a partner, a
major expenditure decision or a change to superannuation, tax or
Centrelink rules.

Focus on preparedness, not
prediction

Markets near highs, interest rates on hold and gold near records can
all attract attention. None provides a reliable shortcut to the next
investment decision.

A structured retirement plan should already allow for periods of
market weakness, changing interest rates and unexpected expenses.
Regular reviews can help ensure that the investment mix, cash reserve,
super strategy and estate arrangements remain aligned with the life they
are intended to support.

If recent market movements or a change in your circumstances has
raised questions about your retirement strategy, contact Acquira Wealth
Partners to arrange a considered review.

General information only

This article has been prepared by Acquira Wealth Partners for general
information and educational purposes only. It does not constitute
financial product advice and has not been prepared taking into account
your objectives, financial situation or needs. Before acting on any
information, consider whether it is appropriate for your circumstances
and, if necessary, seek appropriate professional advice. Past
performance is not a reliable indicator of future performance.

Reine Clemow is an Authorised Representative (No. 461670) and Acquira
Wealth Pty Ltd is a Corporate Authorised Representative (No. 001319892)
of GPS Wealth Ltd, AFSL 254 544, ABN 17 005 482 726.

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