Structured Products for Retirees: The Modern Guide to Retirement Income in Australia

Last reviewed: June 2026

We reckon retirement is the single biggest financial event most Australians will face. And yet the default strategy for funding it has barely changed in decades. You save. You retire. You cross your fingers and hope the market cooperates while you spend down your nest egg.

That approach worked when retirements lasted 10 or 15 years. It does not work when a 65-year-old couple should genuinely plan for at least one partner reaching 90. Possibly 95. That is 25 to 30 years of withdrawals from a portfolio that also needs to grow faster than inflation.

The maths is unforgiving. And the old playbook, the classic 60/40 split between equities and bonds, broke in a very public way in 2022 when both fell together. So what replaces it?

We think structured products deserve a serious look. Not as a novelty. As a genuine retirement architecture that separates your income from your growth, protects your capital in writing, and lets you sleep at night without checking the ASX every morning.

Here is how it works.

The Retirement Problem Nobody Wants to Talk About

Retirement can last 20 to 40 years. That is not a typo. A healthy 65-year-old Australian woman has roughly a one-in-three chance of reaching 95. Her partner might not make it quite that long, but the planning horizon is the same: you need money for decades, not years.

And here is the bit that catches people off guard. Inflation erodes purchasing power relentlessly. If you need $50,000 a year today, at 4% inflation that becomes $110,000 in 20 years. Since 1925, Australian inflation has averaged over 4% per annum. The cost of living doesn't care that you've stopped earning a salary.

But the real killer is something called sequence-of-returns risk. Fancy name, simple concept. If your portfolio drops 20% in the first few years of retirement and you are also withdrawing 10% of the original value for living costs, you now need a 39% gain just to get back to where you started. Not a 30% gain. A 39% gain. The withdrawal accelerates the damage.

Traditional retirement portfolios force you to fund living costs from the same pool that needs to grow. When the market falls, you sell units at depressed prices to pay your electricity bill. Every unit you sell at a loss is a unit that will never participate in the recovery.

That is the retirement problem in three words: you can't wait.

Why the 60/40 Portfolio Stopped Working

For decades the standard advice was simple. Put 60% in shares for growth and 40% in bonds for stability. The theory was that when equities fell, bonds would rise, cushioning the blow.

In 2022 that theory got a reality check. The S&P/ASX 200 fell. The Australian bond index fell. Both pools shrank at the same time. If you were a retiree drawing income from that portfolio, there was nowhere to hide.

The 60/40 was never really designed for retirement anyway. It was designed for accumulation, when you have 20 or 30 years of contributions ahead of you and can ride out the dips. But retirees don't have that luxury. They need income now, this month, and they need the portfolio to last another three decades.

That is a fundamentally different problem. And it needs a fundamentally different structure.

The 80/20 Retirement Architecture

We think the answer is splitting your retirement capital into two distinct pools with two completely different jobs. We call it the 80/20 model, though of course the exact split depends on your circumstances.

Pool One (80%): Capital preservation and income. This is your floor. Fixed Coupon Notes, bonds, term deposits, and capital protected notes. The job of Pool One is to generate structural income regardless of what the share market does. Your electricity bill gets paid from here. Your groceries. Your holidays. It is contractual cash flow, not hope-the-dividend-arrives cash flow.

Pool Two (20%): Leveraged growth. This is your future. Enhanced Growth products with up to 7x index exposure. The job of Pool Two is to compound undisturbed over time, never raided for living costs. You don't touch it. You let the leverage do the heavy lifting while Pool One covers every dollar you need to spend.

The critical concept here is the floor. Before you invest a single dollar, the worst-case return is agreed in writing. Not estimated. Not projected. Written into the product terms. That floor is what separates structured products from traditional investing, where the downside is whatever the market decides it is.

Fixed Coupon Notes: The Retirement Income Workhorse

If there is one structured product that retirees should understand, it is the Fixed Coupon Note. We'll explain why we reckon it changes the entire retirement income conversation.

A Fixed Coupon Note pays a predetermined coupon, typically 10 to 14% per annum, paid monthly or quarterly. That coupon is contractual. It doesn't depend on the underlying companies paying their dividends. It doesn't depend on the share market going up. It is agreed before you invest, printed in the term sheet, and paid on schedule.

For retirees, that single feature solves a problem that has plagued income investors for decades. You no longer need to hope the dividend arrives. You know exactly what you will receive and exactly when you will receive it.

The protection comes from a 60% barrier observed at maturity only. This means the reference stocks can fall during the term and your capital is not triggered. The barrier only matters on the final day. If the stocks are above 60% of their starting price at maturity, you get your capital back in full plus all the coupons you have already been paid along the way.

Across the last 20 MPC deals, the average yield has been 12.7% per annum. Compare that to a term deposit at 4-5%, or the S&P/ASX 200 dividend yield of roughly 4% that can be cut at the board's discretion. The difference is not small.

And here is what matters most for retirees: because the income is contractual, it directly counters sequence-of-returns risk. Your cash flow is structural. It arrives whether the market is up, down, or sideways. You never need to sell units at depressed prices to fund your living costs.

See How Fixed Coupon Notes Work in Practice

This short video walks through the mechanics and a real scenario example using ANZ, CBA, WBC, and NAB at 9.25% p.a.

The Property Insight Most Retirees Miss

We often ask retirees a simple question: how did you build your property wealth?

The answer is almost always the same. They bought a house for $200,000, borrowed $160,000, and 25 years later it was worth $1.2 million. They think the house made them rich. But it wasn't the house. It was the leverage.

A $200,000 property bought with $40,000 equity and $160,000 debt is 5x leverage. If the property doubled, you didn't make 100% on your money. You made 500% on your equity. The bank's money did the heavy lifting.

Now here is the thing. Most Australians would never dream of applying the same logic to their share portfolio. And fair enough, because traditional margin lending comes with margin calls, monthly interest payments, and the risk of being forced to sell at the worst possible time.

But structured products have cracked that problem. Enhanced Growth gives you leveraged index exposure, up to 7x, with no margin calls, no monthly repayments, and a defined downside agreed before you invest. It is the property leverage engine applied to equities, minus the parts that kept people up at night.

For the growth pool of a retirement portfolio, it means your 20% allocation punches well above its weight. A 20% allocation with 5x average leverage gives you the equivalent growth exposure of 100% of your portfolio. That is how the 80/20 model generates both income and growth without asking either pool to do both jobs at once.

Three Retirement Allocation Profiles

Not every retiree has the same risk appetite. Some have just stopped working and the memory of the GFC still gives them cold sweats. Others have a decade of retirement behind them and want a bit more growth for the back half. We generally see three profiles.

The Retirement Core 80/20 is where most of our clients land. It generates enough contractual income to cover living costs while giving the growth pool genuine room to compound. But the beauty of the model is that you can dial it up or down depending on how you sleep at night.

A Real Example: Margaret's Retirement

Margaret is 62 and recently retired from a career in healthcare. She has $1.2 million in super and was told by her previous adviser to stick with the classic balanced fund approach. After 2022 she wasn't convinced.

We restructured her portfolio using the 80/20 model. Here is what that looks like in practice.

Pool One ($960,000): Allocated across three Fixed Coupon Note series paying an average of 12% p.a., plus a term deposit ladder for near-term liquidity. This generates roughly $105,000 in contractual income per year. After tax, more than enough to fund her $75,000 annual spending.

Pool Two ($240,000): Placed into Enhanced Growth products with an average 5x leverage, giving her the equivalent growth exposure of $1.2 million in the ASX 200. No margin calls. No repayments. The defined downside means she knows the worst case before she invests.

The terms roll every three years. At each maturity, we reassess. If the growth pool has compounded well, we might take some off the table and top up Pool One. If markets have been flat, we roll the growth exposure and the income pool keeps doing its job regardless.

Margaret told us something that stuck with us. She said: "I can finally sleep at night. I know what I'm getting paid and I know what the worst case looks like. That is all I ever wanted."

We reckon that is what retirement should feel like.

SMSF Compatibility

If you manage your own super through an SMSF, structured products are available to you. Both Fixed Coupon Notes and Enhanced Growth products can be held inside an SMSF provided you hold a Section 708 wholesale investor certificate.

Many SMSF trustees use structured products specifically in pension phase, where the contractual income from Fixed Coupon Notes maps neatly to minimum pension drawdown requirements. You know exactly what cash is coming in and when, which makes running a pension phase SMSF considerably less stressful.

The investment must fit within your fund's investment strategy, but for most growth-and-income-focused SMSFs, structured products sit comfortably alongside equities, property, and cash.

The Bottom Line

Retirement is too long and too expensive to be funded by hope. Hope that dividends keep coming. Hope that the market doesn't crash in your first five years. Hope that bonds will do what they used to do.

Structured products replace hope with contracts. Contractual income. Contractual floors. Defined worst cases that you agree to before you invest, not after the market decides for you.

The 80/20 model is not the only way to retire. But we think it is the most honest answer to the retirement income problem we have seen. Pool One pays the bills. Pool Two builds the future. And neither pool is asked to do the other's job.

That is how retirement should work.

Mark Gardner

Founding CEO, MPC Markets

30 years in markets across trading, derivatives, ASX & US stocks, and structured investments. Regular financial media contributor for SBS World News, Sky News, Reuters, Ausbiz, 7+, Livewire Markets, Market Index, Stockhead, Sydney Morning Herald & the Age.

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