Despite almost 30 years of compulsory super contributions in Australia, reports show women are retiring with 40 percent less superannuation than men.
Currently, the average superannuation balance for a man (aged 60 to 64) is $270,710. For a woman of the same age it’s $157,050 – a difference of $113,660. There are several reasons for this.
Women Take More Time Out of the Workforce
Women still take the lion’s share of time out of the workforce to raise children and care for ageing parents and young grandchildren. While the Federal Government’s parental leave scheme can help boost income, it does not offer anything towards super. Figures show the gap in superannuation starts to appear after the birth of the first child and continues to widen until retirement.
There Are More Women in Part-Time Roles
Of those women who do return to work after the birth of children, many choose part-time work, therefore lowering their income.
Many Women Have Multiple Jobs
From 2007 to 2015, it is estimated the number of women with multiple jobs increased from six percent to over 18 percent. However, the superannuation guarantee threshold is set at $450 per job, per month. This means if a woman earns $400 for each of her three jobs, she does not meet the eligibility threshold, despite earning $1,200 per month.
The Gender Pay Gap
There continues to be a gender pay gap in Australia as well as an over representation of women in lower paid sectors.
Room for Improvement for Both Genders
Many people are largely disengaged from their superannuation funds and while baby boomers are more aware of the importance of superannuation, there is room for many people to take a more active role. Here are some basic steps everyone can take to ensure they are getting the most out of superannuation.
- Get to Know Your Superannuation – Do you know your total concessional contributions you made last year? How much did you pay in fees? Do you know the growth your superannuation investments have achieved? Do you recall choosing an investment strategy within your superannuation? Only good can come from getting to know your super better, so you are in an informed position to make improvements. It is your money after all!
- Consolidate Superannuation Accounts – If you have multiple superannuation accounts you will be paying unnecessary fees. Rolling the superannuation into one account will save you money, and makes it easier to track the performance of your superannuation.
- Check for Lost Super – If you think you have lost track of some superannuation accounts, for example after changing jobs, name change or address, you can look for lost super through the ATO – click here for more information.
- Seek Expert Advice – Superannuation remains one of the most tax-effective investment options around. The best thing anyone can do, male or female, single or coupled, is to engage an expert to tailor a plan. Your adviser can assess your fund performance and fees, whether you should make further concessional or non-concessional contributions, identify if you are eligible for the government co-contribution, or even if spousal contributions would be appropriate.
Regardless of whether you work full-time, part-time, or in a lower paid job, it pays to have a strategy in place that maximises your benefit.
And it is never too early (or late!) to start. Taking simple and smart steps now will put you in the best position to maximise your super. For more information, contact Kate O’Brien on (02) 9908 9888 or email firstname.lastname@example.org.
Kate is an Authorised Representative of Hillross Financial Services Limited (AR Number 1007833).