How Australian women can supercharge their super

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18 June 2019

Working mother with her baby

When it comes to superannuation, Australian women draw the short straw. According to the most recent reports from the Australian Bureau of Statistics, women are retiring with approximately 63% of the superannuation of their male counterparts1. The average super balance for Australian women aged 55-64 is $196,000, while for men it sits at $310,000. Meanwhile, the ASFA (Association of Super Funds Australia) recommends closer to $545,000 for a comfortable retirement and $640,000 for a couple2. Indeed, this isn’t welcome news for anyone, regardless of gender.

Fortunately, there are strategies we all can implement – ladies, take note! – to supercharge our super. Whether you are just starting out, midway through your career, or nearing retirement, the following five tips will ensure 2019 is the year you make the most of your super.

1. Consolidate! Consolidate! Consolidate!

Perhaps you have switched jobs regularly, moved house and have forgotten to update your details, or simply lost track of which account is which when it comes to your super. Fear not, you are not alone! In fact, the Australian Taxation Office recently revealed the total amount of lost and unclaimed super was some $17.5 billion3. While more than one-third of Australians hold onto two or more superannuation accounts, not all are aware of how much is being lost to fees. That’s why it’s important to streamline your super, save on fees and get that retirement fund back on track today.

We recommend taking the time to do some research into your current active super funds and ask yourself which one benefits your specific needs. Depending on your current job or stage of life, you may have to do this again in a few years time. Still, a little pain today means lots to gain when retirement comes rolling around.

If you’re unsure of how many funds you have, you can view all your super account details, including any that you may have forgotten, and consolidate anytime by linking your myGov account to ATO online services.

2. Sacrifice now to gain later

With compulsory contributions coming out of your salary, it can be easy to neglect your super, year in year out. However, given women especially are falling short of their retirement goals, this can be a real problem. Thankfully, there’s an easy way to turn this around. Salary sacrifice can be a fantastic way to boost your retirement nest egg. It’s also a sure-fire way to take advantage of tax concessions by kicking a portion of your pre-tax salary into super. So what are you waiting for? Calculate your finances to work out what you can spare to salary sacrifice into your super fund.

3. Pre-plan for part time (or time out)

Let’s face it. Throughout their working life, women are more likely to experience interruptions to their career than men. Be it time away from the workforce while on maternity leave (one of the few types of leave from which one does not earn super), the frequently assumed role of primary caregiver for aging parents4, the go-to parent for childcare duties5, or chronic illness6, life gets in the way of preparing for a comfortable retirement. And, while the pay-gap between men and women in Australia is currently the lowest it’s been in 20 years7, it still stands at 14.6%. This all adds up! Or rather, it doesn’t.

It’s all about pre-planning. If you’re set to take maternity leave, chat with your employer about making super contributions during your leave. Of course, this option is not always available. If that’s the case, this could be the time to consider making tax offset contributions from your savings account or setting up spousal contributions with your partner.

4. Investigate your investment strategy

As we mentioned, it’s worthwhile investigating the right super fund for you according to your current needs. This means looking into your investment strategy. For example, a young Australian woman may want to consider enrolling in a growth option. While this comes with a higher level of risk, you have time on your side to weather the gains and losses and, in the long-term, you could be looking at higher returns than you would’ve had if you’d invested more conservatively. For those closer to retirement age, it could be better to consider a balanced, or low risk option.

5. Speak with an expert today

It goes without saying that the right advice can be priceless. Talking with your adviser is a great way to get financial advice regarding your current investments and insurance needs from an expert. Choosing the right insurance policies will ensure you have a safety net in place and the likes of Critical Illness insurance, Life insurance, TPD (Total and Permanent Disability) insurance and Income Protection insurance can be really important. This way you can be sure certain strategies and considerations unique to your situation will be covered.

References

  1. http://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/4125.0Media Release11Sep 2018
  2. https://www.superannuation.asn.au/resources/retirement-standard
  3. https://www.ato.gov.au/Media-centre/Media-releases/Check-now-for-your-share-of-$17-5b-in-lost-super/
  4. https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0009/2874177/HILDA-report_Low-Res_10.10.18.pdf
  5. https://onlinelibrary.wiley.com/doi/full/10.1111/jomf.12531?fbclid=IwAR1Xbro7-r-4-EWaIAcHWPpnlO1SV0hLmZzoXqasLa0G_DR-mk6qT-rTAKE&
  6. https://www.aihw.gov.au/reports/men-women/female-health/contents/how-healthy
  7. https://www.businessinsider.com.au/australia-gender-pay-gap-2018-8

 

These pages contain general information only and do not take into account your personal circumstances, objectives or needs. This information is provided in good faith and believed to be accurate at the time it was placed on the MLC Life Insurance website, however we make no representation or warranty as to the reliability, accuracy or completeness of this information.

The information provided is not intended to constitute financial, legal or medical advice, or to substitute for the need to consult with your advisers or treating practitioners. Before acting on any information in these pages, you should consider whether it is right for you and consult with your financial, legal and/or medical advisers.

Any views or opinions expressed or referenced here (including in any video content) or in any webpages to which hyperlinks are provided do not represent the opinion of MLC Limited, unless we say otherwise. 

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