Australian superannuation funds have called for the “disturbing” gender gap in retirement savings to be closed. The “disturbing” gender gap in retirement savings must urgently be closed, Australia’s super funds have declared. Women retire with about half as much superannuation men, and one in three have no super at all, a report from the Association of Superannuation Funds of Australia (ASFA) has found, leaving them “drastically short” of a comfortable retirement.
The reality is many women retiring in the next decade will “face poverty”, having received little or no super for much of their careers. A not-for-profit group Women in Super says that the average female super fund currently has $44,866 compared to $82,615 for men, The average woman retires on $105,600, which is $91,400 less than the average man has when he retires.
There are now calls for immediate reforms, including changes to the law. We need to get Policymakers to urgently address the issues women have when it comes to their super, otherwise, we will see a dramatic number of women living in poverty when they retire.
One more radical idea that has surfaced is employers contributing 2% more super to the super funds of their female employees to close the gender gap, something that would currently breach anti-discrimination legislation.
Female employees save less because they are more likely to work in lower-paid jobs, work casually or part-time, and take time out of the workforce to look after children or family members. The gender pay gap, currently at 18.2 per cent, is also a key factor.
Women tend to live almost five years longer than men, meaning their superannuation must last even longer. It seems we have a major issue here!
In the absence of any drastic change from any government iniatives, here are our thoughts on how you can rescue their retirement for themselves.
Additional contributions, especially before maternity leave or some other type of career break, can help women earn back some of the potentially lost compounding growth and income multiples. Any small amount you can spare will make a difference.
Low Income Superannuation Contribution
The low income super contribution (LISC) is a government superannuation payment of up to $500 to help low-income earners save for retirement. If you earn $37,000 or less a year, you may be eligible to receive a LISC payment directly into your super fund. You don't need to do anything to receive a LISC.
The government has chosen to axe the low-income superannuation contribution relied on by millions of Australian women to top up their super from 2017.
Finding lost super can be a real treasure. There is billions of dollars sitting in the care of the AT. Some of this money may belong to you?
Women can also protect their retirement savings from excessive fees by consolidating multiple accounts.
Check Your Statement
It is even more important for women to keep an extra close eye on the statements sent from their fund to make sure they are being paid the right amount, Mr Garcia said.
The return on superannuation may not be as good as it could be. As superannuation experts we suggest that a review your investments may mean a swap to a better fit for you may mean an improvement in performance.
Boost from your spouse
Put extra into the woman’s super fund, especially if she is taking a career break. Extra contributions up to $3000 to a non-working or low-income spouse’s superannuation can attract an 18 per cent tax offset, although couples should seek financial advice from us before making this decision.
As always it would be best to get appropriate personal advice from us before taking any action. Please call us on 1300 861 143 to discuss.