May was difficult for Australian investors. The RBA delivered its third consecutive rate increase, oil remained volatile and the S&P/ASX 200 finished the month lower. Conditions like these show why a retirement strategy needs structure before volatility arrives.
The market picture at the end of May 2026
The S&P/ASX 200 was approximately 8,593. The RBA cash rate was 4.35% after a 0.25 percentage-point increase on 5 May, while annual CPI was 4.2%. Brent crude oil was near US 95 p e r b a r r e l , g o l d w a s a p p r o x i m a t e l y U S 4,455 an ounce and the Australian dollar was around US71.80 cents.
The Australian market faced pressure from financials and materials, but the labour market remained resilient, the Australian dollar held up and selected commodities strengthened.
The RBA’s third consecutive increase
The May increase reversed the final cut made in 2025. The RBA cited inflation above its 2–3% target and oil-price pressure linked to conflict in the Middle East. Economists were divided over whether the June meeting would produce a pause or another increase.
Interest-rate changes affect people differently. Borrowers may face higher repayments, while cash and term deposits may offer improved income. The important issue is how the change affects the whole financial structure rather than one account in isolation.
- Global themes affecting Australian portfolios
- Energy and inflation
Brent crude briefly reached approximately US 116 d u r i n g M a y b e f o r e s e t t l i n g n e a r U S 95. Higher energy prices can feed into CPI and reduce the RBA’s flexibility to lower rates.
US monetary policy
The US Federal Reserve faced its own inflation challenge. At the time, markets assigned roughly a 50% probability to a US rate increase before year end. US policy can influence Australian bond yields, currencies and borrowing conditions.
Commodities
Lithium carbonate prices rose nearly 49% in the month ending 9 May, while iron ore, copper and gold also advanced. For portfolios holding ASX-listed miners, stronger commodities partly offset weakness in banks and other rate-sensitive sectors.
What is a bear market?
A bear market is generally defined as a fall of 20% or more in a broad market index from a recent peak. A correction is commonly described as a decline of 10–20%.
Historically, bear markets in Australian and global shares have often lasted around 9 to 18 months, but the range is wide. The 2020 COVID decline recovered unusually quickly, while the Global Financial Crisis took much longer to reach its low.
No historical average can predict the next recovery. The practical lesson is that selling after a fall can turn a temporary decline into a permanent loss.
Why retirement liquidity matters
A cash and income reserve can fund near-term spending while giving growth assets time to recover. Its role is not to outperform shares. It is to reduce the chance that a retiree must sell them during weakness.
- Practical retirement considerations
- Review insurance after leaving work
Life and income-protection cover that was appropriate during employment may become less relevant as dependants become self-sufficient and financial circumstances change. Review the purpose, structure and cost of each policy before cancelling cover.
Discuss money with adult children
Conversations about estate intentions, enduring powers of attorney, aged-care preferences and the location of important documents can reduce future confusion. This does not require disclosing every financial detail.
Check pension drawdown settings
Account-based pensions have minimum annual drawdown rates set by government. For people aged 65–74, the minimum was 5%. Drawing above the minimum may interact with tax, cash flow and social-security outcomes, so the rate should reflect the broader income plan.
Consider a term-deposit ladder
A term-deposit ladder spreads deposits across different maturity dates—for example, 3, 6, 9 and 12 months. Regular maturities can support liquidity while reducing the risk of reinvesting the entire amount at one future interest rate.
Property and downsizing
Higher rates and tax changes were weighing on credit appetite, while tight rental vacancies and limited housing supply continued to support parts of the market.
Eligible Australians aged 55 and over who have owned their home for at least 10 years may be able to contribute up to $300,000 each from sale proceeds into super outside the standard contribution caps. Conditions apply, including a contribution deadline, so advice before a sale is important.
A plan should expect volatility
A written plan can separate near-term income, medium-term defensive assets and long-term growth. That structure reduces the need to react to incomplete information or attempt to predict the next market move.
If rates or market movements have changed your cash flow or comfort with risk, contact Acquira Wealth Partners to review whether your structure remains appropriate.
Important information
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. Market data is approximate and sourced from publicly available information as at the end of May 2026.
Reine Clemow is an Authorised Representative (No. 461670) of Acquira Wealth / Acquira Wealth Pty Ltd is a Corporate Authorised Representative (No. 001319892) of GPS Wealth Ltd | AFSL 254 544 | ABN 17 005 482 726 | www.gpswealth.com.au | Email Disclaimer 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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