Time to read : 3 Minutes
According to the Association of Superannuation Funds of Australia (ASFA), women end up with around 23% less super than their male counterparts at retirement.
🗒️ In fact, a 2021 study conducted by KPMG found that the average super balance for men aged 60-64 years is $204,107, whereas women in the same age group had $146,900 — a gap of 28%.
👶 There are a number of reasons for this, chief among them is that women are more likely to take time out of the workforce to care for their family.
🫰When you combine this with the gender pay gap in Australia, which currently sits at 14.1%, it’s not hard to see why women are more likely than men to find themselves in a state of severe poverty by the age of 60.
Engaging with your super is key
Although we can’t solve the pay gap, or change the fact that the government should be doing more to address this gulf, we can offer some sound advice on boosting your super to ensure you’re on track for a comfortable retirement.
1. Be aware of your super
The first step to taking control of your super is simply being aware of it. Many women don’t engage with their super because life often gets in the way. This means we're less likely to know how much we have, where it's invested, and how to make the most of it.
🤓 Understanding your super can help you make informed decisions about your future.
2. Make extra contributions
Superannuation is a long term plan that we have to think about today.
One of the best ways to boost your super is to make extra contributions. If your employer offers a salary sacrifice option, take advantage of it. You can also make personal contributions from your after tax income.
💰The Australian Government also provides a co-contribution scheme that can boost your personal super contributions by up to $500 per year, and although you’re probably working within an already tight family budget, every little bit counts, especially when the government is prepared to match it.
3. Invest wisely
Your investment choices can have a big impact on your super balance, so it's important to choose wisely.
There are some simple tools for comparing super funds against their fees and returns, which is a great place to start. You might also want to look at how your money is being invested e.g., whether it’s being used to fund industries or initiatives you may not agree with.
☎️ Most funds let you choose from a range of investment options, but if you're not sure where to start, speak to a financial adviser.
4. Consolidate all your accounts
Remember that retail position you had when you were 16? Or that part time nanny role from uni? If you've had multiple jobs, you may have several super accounts, and there’s likely a pretty penny in each of them.
Having multiple super accounts can make it hard to keep track of your money and could be costing you in fees. Consolidating your accounts into one is a great way to simplify your finances and boost your balance.
🔍 You can search for all existing super accounts and consolidate them online through the Australian Taxation Office.
The bottom line
Women are, sadly, statistically more likely to fall into poverty from the age of 55, which means that we apparently have to work that bit harder to secure a comfortable retirement until these inequities are addressed at a more systemic level.
👵🏽 Retirement may seem like a long way off, but it's never too early to start planning. Making your super a part of your financial planning now will help you in the long run. Think about how much money you'll need to live comfortably and start making small-but-smart savings choices.
👛Yes, there’s a super gap, but the sooner you start saving, the better off you'll be.
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
