By Liz Maroney, Senior Westlawn Wealth Adviser 18 March 2014
While earlier this month International Women’s Day celebrated the economic, political and social achievements of women in the past, present and future, sadly, Australian women still lag men in the superannuation stakes.
According to the Australian Bureau of Statistics (ABS), the average Australian woman currently retires with $105,000, nearly half that of her average male counterpart with $197,000.
And according to the latest figures from the Association of Superannuation Funds of Australia (ASFA), the average woman holds a super account balance of $44,866, while for the average man it is almost double at $82,615.
Similarly, AMP’s Retirement Adequacy Index revealed in the 6 months to December 2012, the average super balance for men was $48,703 while for women it was $33,047. The super gap was widest amongst those aged 50 to 59 where men’s super balances averaged $93,833 compared to just $54,720 for women.
This gap between the super balances of men and women has prompted the head of ASFA, Pauline Vamos, to urge women to spend “an hour sorting out their super”.
“There are many things in life that we cannot control, but taking control of your super today could add thousands of dollars to your retirement savings,” Vamos said.
“We know people are time poor and for many women, who are juggling things such as work, kids and other chores, sorting out their super is the last thing they have time for. However, the tough reality is that around 90% of women will retire without enough in their super account to fund their lifestyle in retirement,” she added.
When you consider that, according to the ABS, 56% of men approaching retirement expected their super or annuity to be their main source of income compared to just 49% for women, and that women, on average, live 5 years longer than men, it’s important for women to heed the advice and act now.
Time to take control
It’s never too late to take action on your super, but of course, the sooner you act the better off you’ll be in retirement.
Here are some simple tips women can take now to help reverse the super gender gap.
Like many women, you’ve probably had a few different jobs during your career, and therefore, you may have a number of different super funds. By consolidating your super into the one fund, you can reduce your fees and help boost your overall super savings.
Salary sacrificing some of your pre-tax income into your super can be a tax-effective way to increase your super balance.
If you’re over 55, you could use a transition to retirement strategy to top up your super balance by salary sacrificing into your super and then drawing on your existing super through a transition to retirement pension.
Set specific goals for what you want from your retirement. Then, determine how much money you’ll need to meet those retirement goals. Having clearly defined goals will make it much easier to achieve the lifestyle you want to enjoy in retirement.
Retire debt before you retire.
And finally, seek professional advice to ensure you are taking advantage of all the tax benefits available to you through your super, particularly as you approach retirement age.
The advice on this site may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial, tax and/or legal advice prior to acting on this information.
Westlawn Wealth Management Pty Ltd ABN 32 124 861 409, Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749, Australian Financial Services Licensee, 105 -153 Miller Street North Sydney NSW 2060.