FACT: Women on average end up with way less super by the time retirement rolls around compared to men. Waaaaay less.
It sucks. And it’s not fair. But it’s reality.
Bite me! Why do we end up with less than the blokes? And more importantly, what can we do about it? Let’s look at the facts.
The dirt on women’s superannuation
Women make up almost half of the working population and we certainly work as hard as them (between home and work, let’s face it). But on average we’re retiring with 47% less superannuation than men
We also live, on average, around 4 years longer than the boys. Awesome! Now there’s a win. But how we gonna live our best grandma lives with no money?
Then there’s the government tax concessions – which are skewed in favour of higher income earners (yep – for the most part that’s the guys) who get an oversized benefit from tax concessions. According to the report ‘Rich men and tax concessions’ by The Australian Institute, men pay 65% of the tax but get 70% of the concessions. For women, it is the opposite. We pay 35% of the tax but only receive 30% of the concessions. What the actual?! This system makes no sense.
Why do women retire with less?
For starters: we’re still dealing with the gender pay gap. Full-time working women earn around 17.5% less than men. We also tend to dominate the industries that don’t pay as well as traditionally male-dominated industries (think retail, health and hospo).
Then there’s the babies: On average mothers take six years out of the workforce to give birth to children and raise their family. We can’t compare to the stats for men cos at this time they’re statistically insignificant, although it’s slowly starting to change. Hoorah for the Dads! However, meanwhile back at the ranch women are bearing the greatest of unpaid care, on top of the majority of unpaid work (yep housework is still largely the domain of women).
Six years without income AND super payments is a LOT when you consider the effects of compound interest. No wonder we struggle to keep up with the fellas.
On top of that, around 43% of women only work part-time (someone’s gotta do school runs, after-school activities etc, etc!) and many part-timers don’t qualify for super contributions from their employers if they don’t meet the $450 monthly income minimum.
Lower earnings equal lower super contributions. Makes sense, right?
So, what’s a gal to do?
Greater equality in superannuation for women is a topic that’s starting to gain traction amongst policymakers. And there are more organisations out there advocating for women, superannuation, and change. Not to mention the women’s financial education and business groups doing it for their sisters. Yep! We see you and thank you.
But we don’t recommend holding your breath. Significant change takes time, and that’s something none of us have when it comes to saving for the future. So, in the meantime, here’s a few ideas to start boosting your superannuation today so that come retirement time, you’ll be sitting pretty:
Planning on having kids in the next couple of years? Start making extra contributions to your super now to make up for time you may spend out of the workforce. You can talk to your employer about salary sacrificing some extra dough into your fund on top of their contributions. We think contributions are an underrated superpower – check it out here
Partnered up? Review your retirement goals with your partner. Have an honest conversation about your long-term future together and come up with a retirement savings plan. And why not give your partner a chance to share the caring responsibilities so you can both keep your careers on track? You love each other enough to get in the family way, so love each other enough to make sure it’s going to work for all of you. If you do take time out, make sure you learn about spouse contributions. The link above will take you to some info from the govt on this
Choose the right super fund and consolidate your accounts pronto! Having multiple accounts means you’re paying multiple sets of fees and that’s a sure-fire way to see your overall balance plummet. The good news? We can help you sort that out. STAT.
Use our retirement planner to see how you are tracking and work out if there are ways you can save even more. We can also look at your super, compare all the funds and show you how much you could save by switching.
Mid-week money win! You’re welcome.