As superannuation investors approach retirement they should retain exposure to growth assets to protect against longevity risk, according to a report by Watson Wyatt.

The report found the risk of a retiree couple running out of money over their lifetime can be reduced by 14 per cent by shifting from a conservative to a growth-oriented strategy.

"Individuals can naturally become more risk-averse as they approach retirement. Many will believe that a conservative investment strategy, with minimal exposure to growth assets, suits them best," Watson Wyatt principal and consulting actuary Nick Callil said.

"But a decumulation period of 20 years or more still requires a relatively long-term investment strategy. To help combat longevity risk, retirees will generally benefit from maintaining a meaningful exposure to growth assets during their drawdown phase."

Callil said default investment options should be set with this in mind.

"Ideally, the portfolio of growth assets should be well diversified and constructed to have exposure to a number of different 'return drivers' to ensure that the retiree is not overly reliant on any one asset class to generate strong returns," Callil said.

Callil has called on the government to promote the development of cost-effective products such as long-term indexed bonds to protect Australians against longevity risk.

"On its own holding a bias to growth assets will not be enough to protect retirees against the financial consequences of living too long. Additional support via retirement products which provide longevity protection would be helpful for many retirees," he said.

More than one million Australians are expected to retire in the next ten years and another three million will reach age 65 by 2027.