In 2012 the Australian Human Rights Commission highlighted the extent that women significantly lag behind men in the amount of superannuation they hold at retirement.

In this article we look at first what contributes to this disproportion, and the important steps that can be taken to bring back balance.

Why are women reaching retirement with significantly less superannuation than men?

There are four primary reasons:

  • On average, women are on lower incomes compared to men
  • Time is taken out of the workforce to care for children, which substantially reduces superannuation contributions, and impacts career progression
  • Divorce or the death of a partner affects a woman’s financial future more than men in similar circumstances
  • Women tend to invest more conservatively than men which reduces their final superannuation amount.

What can you do to help redress the imbalance?

  • Review your superannuation investment strategy. A conservative investment strategy may sometimes be appropriate and can lead to good results. However such a strategy may be at the expense of achieving your retirement goals. Getting advice is imperative.
  • Contribute more early. Women are having children later in life, having fewer children than in the past and tending to return to work sooner. By planning for your retirement early and contributing more to superannuation, you will enjoy the results of compound interest over a longer period
  • Start on your financial education to understand the options available to you
  • Update your financial plan covers your own individual interests and concerns first, then the others in your life
  • Review your insurance coverage. Women are more under-insured than men. Coverage such as Income Protection, Total & Permanent Disability (TPD) or Trauma insurance can help protect against unforeseen events.

A plan makes all the difference

A simple plan is infinitely better than no plan at all, and a plan made early can cost far less in the long run to achieve the same end result.

When completing a financial plan, we work with you to help you think through questions for the future including:

  • the current financial demands upon you, such as paying off a home, your children’s education and so on
  • time you want to take out of work
  • holidays and travel
  • where you would like to live
  • when would you like to retire

From there we can help you work out how many working years are in that picture and the amount of superannuation that will be needed to meet your retirement goals. Speak with us if you’d like to know more.