Did you know that around 80 percent of women retire with insufficient savings to fund a comfortable lifestyle? It's quite alarming, which has prompted me to put together some tips for women when it comes to their super.
Recent research conducted by the Australian Government’s Workplace Gender Equality Agency (WGEA) shows that on average, women accumulate approximately half the level of men’s retirement savings. There are a number of reasons why this is the case. Research indicates a narrowing of the gender pay gap since 1980 however, women continue to earn 14% less than their male counterparts as of May 2021. Not to mention that women are likely to take time off to raise children and tend to work part-time when they re-enter the workplace, which potentially reduces their lifetime earnings.
If you retire with insufficient superannuation savings, it means you may not be able to maintain your current quality of life in retirement. In addition, you may need to rely on the Age Pension to supplement your income in retirement. There are a few simple things you can do to improve your retirement confidence and close the savings gap.
When was the last time you reviewed your superannuation? I would encourage you to check your super to make sure your investment strategies and the insurance covers are appropriate for your needs. If you have worked for several different companies over your career, your retirement savings could spread across different super funds. The fees that you are paying could add up to thousands of dollars over time. Moving all your super into one account should help to save on fees whilst making it easier for you to manage.
Any amount that you contribute to super in your working life should help boost your retirement savings. Your employer will contribute at least 10% of your salary to your super fund but if you make extra contributions your super balance can grow even faster. You could speak to your employer about setting up salary sacrifice, where you contribute an additional amount to super from your pre-tax income. Small contribution amounts over a long period of time could have a significant impact on your super balance when you retire. Wherever possible, ensure you continue making contributions during periods when you are out of the workforce, on reduced hours, or self-employed.
If you earn less than $56,112 per annum and you meet the eligibility criteria, the government will match 50 cents for every dollar you put into super from your after-tax income, up to a maximum of $500 a year.
Encourage your spouse to contribute too. Your spouse can split a portion of their concessional contributions each year with you to help boost your super balance. You and your spouse could also take advantage of Spouse Contributions, which could provide a tax offset of up to $540 per year to your spouse whilst accumulating more super for you.
Think about the kind of retirement you want and how much income you may need to support that lifestyle. Taking the time to plan ahead for your retirement could transform your super balance in the future. If you would like to learn more about taking control of your financial future, please contact us.
Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email email@example.com or visit www.hewison.com.au
Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.