Why it pays to take action today.
The term ‘superwoman’ has typically been used to describe a female who juggles a career, a relationship, motherhood, running a household or potentially all of the afore-mentioned. With their attention focussed on multiple priorities, a woman’s retirement savings tend to be an area that is often overlooked.
Although retirement seems like a lifetime away, the reality is that women have a lot of catching up to do when it comes to their super. In fact data compiled by the Workplace Gender Equality Agency (WGEA) shows that in 2016/2017, median superannuation balances for women at retirement (60 to 64 years) were 20.5% lower than those for men¹.
Why is women’s super falling behind men’s balances?
There are a couple of reasons for this.
Women are more likely to take time off work to be unpaid caregivers for kids and other family members. During this period, they are missing out on super contributions from their employment.
If female employees return to work, they are more likely to take on part-time jobs, which results in lower salaries and employer super contributions. Additionally, those who earn under $450 a month are not covered by the super guarantee, and miss out on super contributions from their employment.
The gender pay gap is also another contributing factor. The WGEA found that women earn on average $253.60 per week less than men². This means that women accumulate less savings in super.
What can women do to take control of their super?
The above considerations, plus the fact that on average, women live around four years longer than men³, are reasons why it can be helpful for females to pay more attention to their super.
Here are some tips to get you going.
1. Develop a budget
Drawing up a budget can help you assess how you are spending your hard-earned money and trim off non-essential expenses such as a magazine subscription or gym membership that you’ve not been using. You may find our Budget Planner Calculator useful for this exercise.
2. Small contributions can add up
Making small, regular contributions sooner rather than later, can have a positive compounding effect on your overall super balance and help ensure you have enough to fund your golden years. Find out more about the different ways you can grow your super and how you and/or your partner may save on taxes.
3. Review your super investment
Log in to your account to review your investment to ensure you have chosen options that meet your needs. Read more about things to consider when selecting your investments.
4. Check your details
While you are logged in to your account, check that we have your tax file number (TFN) and your latest contact details. These are important so that your super won’t get lost if you change jobs and you are not paying excess tax.
5. Consolidate your super
If you have ever changed jobs, your name or address, you may have more than one super account. Consolidating your super into one account can help you save on fees and manage your investments in one place. However, be sure to check that you don’t lose any benefits (such as insurance) for accounts that you plan to close. Find out more about consolidating your account and the things you should consider before doing so*.
6. Review your insurance
If you have insurance cover as part of your super, the premiums are deducted from your account balance so check that the cover is suitable for your needs and that of your family.
7. Seek professional advice
If you need help with developing a holistic strategy that is tailored to your circumstances, a financial adviser can assess your requirements and recommend solutions that address your assets (including super), liabilities and insurance cover.
Find out how our financial advisers can assist you or book an appointment with the team.
¹Workplace Gender Equality Agency, Retirement Income Review, February 2020 (Accessed 4 February 2021).
²Workplace Gender Equality Agency, Australia’s gender pay gap statistics 2020 (Accessed 28 January 2021).
³Based on life expectancy in 2017-19 according to the Australian Bureau of Statistics, Gender Indicator, Australia, Reference period: 2020 (Accessed 27 January 2021).
Any advice contained in this document is of a general nature only, and does not take into account your personal objectives, financial situation or needs. Prior to acting on any information in this document, you need to take into account your own financial circumstances, consider the Product Disclosure Statement for any product you are considering, and seek independent financial advice if you are unsure of what action to take.
Need more guidance?
Depending on the nature of the advice you are seeking, we can provide limited advice at no additional cost.
Contact our financial planning team today.