Women are super but what about their super?
It’s no surprise that women have less superannuation than men at all stages of life.
Currently women retire with 47% less super than men.
While our reliance on self-funded retirement takes the pressure off the federal government to support an ageing population, the system is inequitable for one half of the population who, on average, earn less, perform a greater share of unpaid work and live longer.
The reasons for the super gap are often discussed, and yet there remains no obvious solution to this problem. It all seems rather gloomy, I know, but don’t despair.
Here are some suggestions for nurturing your super balance before you retire.
Make additional contributions
The most obvious suggestion is to make additional contributions either through a salary sacrificing arrangement with your employer or by depositing funds directly.
Rather than think of these voluntary contributions as a personal sacrifice, consider them an investment in yourself, because you’re worth it.
Your super fund is actually the perfect savings account: easy to put money in, difficult to get money out and lower tax on investment earnings.
Making additional contributions may also have tax benefits. However, there are limitations, so check the tax office website or speak to a financial adviser (which I am not) to get more information.
Find the right super fund for you
There are many types of funds with different fees and performance histories. The ATO website has information on what to look for when comparing funds.
Get to know your fund better
Make sure it is doing the right thing for you. Did you know that most super funds offer multiple investment options and free financial planning advice?
We all love free stuff so find out if your super fund offers this service.
Rollover multiple funds
Consolidate your funds and claim any lost super. You’re probably sick of hearing this (I know I am), and yet there remains nearly $12 billion worth of unclaimed super in Australia.
I keep checking the ATO register in the hope that some of that fortune miraculously turns out to belong to me but to no avail. Maybe some of it belongs to you.
Check your contributions
If you are in paid work, check your employer is making the right contributions.
Presuming they are, the best way to increase your employer’s compulsory contribution into your super fund is by getting a pay rise. Asking for a rise is not always an option but even a small increase of a few per cent means that you can put a little extra into your super.
44% of women rely on their partner’s super contributions in retirement. So if your partner is the main breadwinner, ensure they have appropriate life and disability insurance, because if something happens to them your shared super balance may stagnate.
Generally, super funds offer life and disability insurance at competitive rates, so make sure they/you are covered. And while we’re at it, perhaps your partner could do with a pay rise as well. Pay rises for everyone, I say!
Cut the apron strings
Mothers tend to have the lowest super balances. If your little darlings have reached adulthood and continue to live under your roof, rent free, perhaps it’s time to suggest a deal.
You will continue to provide free accommodation on the condition that they return the favour and provide free accommodation for you upon your retirement.
Hopefully, this will inspire them to cut the purse strings, thereby reducing your bills and allowing you to make additional contributions to your super.
The risk is that they decide to stay forever, thereby requiring you to live with them for the rest of your life. Sounds risky, I know. Perhaps scrap this idea.
All jokes aside, the financial difficulties facing women in retirement are a systemic problem that cannot be fixed at an individual level.
Governments need to take further steps to ensure older women are financially secure by providing more support to single parents, low-income earners and carers, who are mainly women. We all deserve to be happy in our retirement (and preferably not forced to be living off our children).