How much do you have to retire on? As a woman, unfortunately, it appears that it’s much less than your male counterparts.
Alongside gender-based wage disparity, it has now been revealed that women are retiring with far less super than men.
Lower wages is a key contributor to this disparity, as men continue to earn more than women. However, it isn’t the only reason why this super gender gap exists.
Here, this article will address the real reasons why women are at a disadvantage when it comes to their super, and ways that women can secure a better retirement outcome.
Why are women retiring with less money?
A recent study into seniors and super has uncovered that the vast majority of seniors feel there is a gender gap in superannuation balances at retirement (83.2%), with female seniors more likely to say this compared to males (88.8% vs. 77.2%). Of the seniors who feel there is a gender gap in superannuation balances, the large majority (76.7%) attribute this to career breaks (i.e. women tending to take more time out of work to take care of their family) and close to two-thirds (65.1%) say this is due to the gender pay gap.
To affirm these statistics, let’s look at the two main factors driving this superannuation pay gap:
- Despite recent progress and continued attempts to shine a light on gender pay gaps, women are still earning less than their male counterparts. In Australia, it’s about $224.40 less per week than men. Women are also more likely to be employed in part-time or casual roles, and therefore earning less and having less money to put away into their super.
- Traditionally, women are more likely to go on paid parental leave or exit the job field in order to take care of family. This absence of pay means they have considerably less income to live on as well as the absence of consistent superannuation contributions. While the Australian government offers a Paid Parental Leave Scheme, it doesn’t include superannuation. Therefore, women are having to make voluntary payments on what little income they receive while out of work.
The combination of social and economic factors means that women have a harder time building a retirement fund. This harsh reality means that women are more vulnerable to being financially unstable in their retirement years. In the more extreme cases, women are also facing a life of poverty thanks to a retirement system that fails to recognise the discrepancies women face.
Ways to boost your retirement fund
Women want independence. They want equality. Which is why most of you who are reading this right now aren’t too fond of the idea of a retirement where you’re having to rely on government hand-outs. To avoid this situation, there are some steps you can take no matter what age you are at.
Make regular contributions to your super fund – Take control of your super. Make your own voluntary contributions wherever possible. Also don’t forget that if you’re earning less than $54,837 a year, the government can contribute up to $500 to your super account.
Consolidate your super – If you have more than one super account, look into putting them all into one low-fee super fund. This will make managing your super easier. While you’re at it, don’t forget to do a lost super check to uncover any lost or forgotten super.
Contribution splitting – Have your partner give some of their super to you whilst you’re on parental leave. There are also tax benefits to this. Similarly, spouse contribution allows your spouse to contribute to your super fund after-tax.
Speak up – Raise pay gap concerns to your employer, and stay informed with superannuation and pay gap reforms. Acknowledge your right to equal pay and an equal retirement.
Women face many challenges when it comes to fair pay and super. However, it’s never too late to take control of your retirement and to improve your super fund. While women are at a disadvantage, there are ways they can secure a more even footing; From taking stock of their financial situation to being more mindful when it comes to super contributions, and even planning a visit with a financial advisor are all ways to help reduce the pay gap that they face. Women should also be encouraged to stand up for their rights and pressure those systems that keep them from their economic security.
Jacqueline Coombe has been a prolific reader since childhood, and now channels her love of the written word into writing content on a range of topics from business, marketing, and finance to travel and lifestyle.