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Women and super – bridging the gap
Did you know that the average super balance for men in the work force age between 58 and 62 years is approximately $210,000 and for women that balance is $95,000?
Only a small proportion of retired women live on incomes above $50,000 and more than half have incomes of less than $30,000, while 77% of women rely on some form of Age Pension in retirement.*
Scary, isn’t it! Below are some of the reasons why:
• Part-time work: if women decide to have children they generally work part- time for some of their career. This can be anywhere up to 20 years which leads to significantly less money contributed to super compared with men.
• Gender pay gap: the difference in average weekly pay packets between men and women has risen to its highest level yet of 18.2%. This gender gap effectively translates to women working five days but only being paid for four.
• Starting a family: when women decide to take a break to have kids it can often extend from the 12 month maternity leave to up 5 years, once the kids start school, this generally means no contributions to super.
• Small business owners: once they have children, some women choose to start their own small business to create more flexibility. As self-employed individuals they will no longer receive the 9.5% employer contributions to super.
• Elderly parents: women are significantly more likely to take time off to care for elderly parents or relatives.
So what can women do to help themselves to a comfortable retirement?
• Determine your financial goals and objectives and have a plan to educate yourself and make the best or your money.
• Start planning early by making extra contributions into super before tax (salary sacrifice).
• Take advantage of the government co-contribution by making after tax contributions to your super.
• Simplify your super by rolling all your super accounts into one. Consolidating your accounts and/or tracking down your lost or unclaimed super could save you thousands of dollars in unnecessary super fund administration fees.
Super will probably be your biggest asset outside your home. Getting personal advice can make a really positive impact on your retirement well-being.
So sit down with a trusted Financial Adviser, like Katherine Hann, identify all your super accounts, check your balances, work out what you’ll need to retire on, calculate the gap, and then find out if there is anything you can afford to do to help bridge the gap.
Call Katherine for a no obligation first appointment on 08 8299 9927.
*Source: Australian Institute of Superannuation Trustees, Super-poor but surviving: experiences of Australian Women in Retirement, 2011