You may know the intimate details of your household finances, but what about your super balance?
Along with the family home, super is often one of your most valuable assets. Yet many women are lagging behind men when it comes to the amount they’ll have saved in super for their retirement.
Figures from the Australian Bureau of Statistics show that men between ages 55 and 64 have a higher average superannuation balance than women the same age: $321,993 compared with $180,0131. In fact, across all age groups, men have more super, and a quarter of women have no super savings at all2.
Why do women have less super?
The reasons vary, but commonly link back to women’s roles as caregivers. Women often take time out of the workforce to have children, or to look after ageing parents, and when they return to work, many may do so in lower-paid roles or on a part-time basis. Statistics show 44% of employed women work part-time, compared with 15% of employed men3.
On average, women also earn less than men, with the gender pay gap sitting at 17.9% as of November 20154. Coupled with a longer life expectancy – 84 years for women compared with 80 for men5 – this equates to a financial triple whammy.
What could it mean for women and retirement?
To retire comfortably now, it’s forecast that a single female would need $43,062 per year6. Even a modest standard of living in retirement – which allows for the basics – will cost $23,767 a year7, assuming you are in relatively good health and own your own home.
With this in mind, the reality is that some women will be unable to lead the lifestyle they desire in retirement, some may need to delay retirement and work for longer, and some may need to supplement their retirement income with the Age Pension.
How to be a super woman with your super
While the statistics show the challenges women face, there are a number of things you can do today to understand your super and make it work harder for you.
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Consider consolidating
You can do a lost super search to help you track down any super you may have left behind when changing jobs and consolidate it into one super fund. But make sure you look out for any exit or withdrawal fees, or if there are implications to your insurance.
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Salary sacrifice into super
Did you know you can ask your employer to put some of your pre-tax salary into your super? You’ll only be taxed 15%* on this amount. Bear in mind there are annual individual tax limits that apply to your employer super contributions. Find out more about how salary sacrificing could work for you by using our calculator.
*30% if you earn over $300,000 pa
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After-tax contributions
As well as getting your employer to contribute more money into super, you can also contribute more yourself after you’ve been paid. There’s currently a limit of $180,000 per year for these super contributions.
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Low income super contribution
If you earn $37,000 or less a year and put some pre-tax money into your super, you may get an automatic payment into your super account of up to $500 from the Australian Taxation Office. Learn more about the low income super contribution.
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Spouse contributions
If you’re a low income earner or don’t earn an income at all, your spouse (or de facto partner) can put after-tax money into your super to top it up. If you earn $10,800 or less and your spouse contributes at least $3,000, this can get them an 18% tax offset—saving them up to $540 per year in tax. If your annual income exceeds $13,800 you can still receive a spouse contribution but they won’t be able to receive the tax offset.
We’re here to help
If one of your goals is to retire right and you’d like help with boosting your super to achieve this goal, please call us on 02 9299 1500.
Source: AMP October 4th 2016
1,2,3 ABS Gender Indicators Australia 2016
4 Economic Security for Women in Retirement
5 http://www.aihw.gov.au/deaths/life-expectancy/
6,7 http://www.superannuation.asn.au/resources/retirement-standard
