Women and super – the unique challenges they face.

June 15, 0207

Will you have enough super to live the retirement you want? As a woman, there are unique challenges when it comes to creating your superannuation nest egg. Here are some suggestions for taking charge of your finances – and your future.

Women still earn less than men and a significant amount take time out from the workforce to raise families, with many choosing only to return to work part-time. This puts women at a significant disadvantage when it comes to superannuation.

The cold hard facts

Other factors that impact the superannuation gender gap include divorce and living in a single income family, and the fact women have a longer life expectancy than men. Add to this that the cost of living for everything from personal care products, to clothing and haircuts is more expensive than it is for our male counterparts.

According to ASIC’s MoneySmart website, at retirement age, Australian women have, on average, $131,150 in superannuation – which is less than half of what the average man has. (Based on 2013-2014 statistics).

Find your lost super

So where do you start when it comes to getting on top of your super? The first step is to cross off ‘consolidate my super funds’ from your never-ending to do list. You’re probably paying fees across multiple funds so go to findmysuper.com.au, enter your details, and all your accounts, no matter how old, will be tracked down for you. Then you need to choose which fund you’re going to consolidate into. Select your super fund wisely. Do your research. Factor in the level of insurance each fund offers, and look closely at their fees, and where and how they invest your money.

Planning for a family

Pauline Vamos from the Association of Superannuation Funds of Australia (ASFA) advises women who are starting a family to discuss with their partner the possibility of maintaining contributions to both super accounts, even if it means less is going in to the account of the partner who continues to work full-time after the baby arrives.

“When you are planning for your family, plan for your super as well. So, encourage your partner or your spouse to make extra contributions into your superannuation account so that you are not building up that ‘baby debt’, which is what we call when people don’t put money into their account when they take time off to have a baby.”

Pauline also suggests examining various parental leave schemes.

“Look at the parental leave schemes. Look at what your employer is willing to contribute. See if you can negotiate. If they don’t have a parental leave scheme, at least contribute to your superannuation. It doesn’t cost that much.”

Top it up

The smartest way to make sure you have enough super is to retire comfortably is to add extra money to your account whenever possible on top of the mandatory employer contribution of 9.5% of your salary. There are also tax breaks for those who add extra money into their superannuation.

These concessions only apply to your pre-tax income, and are capped at$30,000 for the over 50s. To find out more about tax superannuation tax concessions click here.

The Australian government also offers assistance for those who earn less than $50,454 (as of the 2015/16 financial year). If you add extra contributions to your super, the government will contribute $0.50 per dollar up to $500. Go to ato.gov.au/individuals/super to find out more.

Superannuation tips and tools

If you need help getting started sorting out your financial future, go to ASIC’s Women’s Money Toolkit. Launched in 2015, it is targeted specifically at women to help them plan for a solid financial future. The site also offers a variety of calculators for different life stages that allow you to figure out how much super you will have to retire.

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