Australian women are retiring with an average superannuation balance less than half of men’s. (1)
The theme of the International Women’s Day this year, was “pledge for parity”, placing the focus squarely on closing the gap between men and women for retirement and superannuation savings should be a priority.
A pay gap of nearly 18% between men and women working full time in the workforce (2) is one of the key factors amplifying such a disparity in retirement savings. This pay gap, as well as breaks in the workforce to raise children, part time or casual work, combined with longer life expectancy means women are disadvantaged when it comes to superannuation contributions and saving for their retirement.
It’s often only the issue of inequality of pay between men and women that is in the spotlight, but the long-term effects of a pay divide translates into lower savings when it comes time for women to retire, and the results can be devastating.
The average superannuation balance for women at the time of retirement is just $138,150 compared to $292,500 for men (2013/14) (3). The AFSA Retirement Standard recommends that $545,000 in superannuation is required for a single person to be able to live a comfortable lifestyle (4).
We are also seeing gender divide when it comes to managing SMSFs. Men are far more likely than women to initiate their SMSF (77% men compared to 30% women), and further women are less confident than men in managing their SMSF (with 83% of men confident in managing their SMSF vs 62% of women). (5)
Australia’s population hit the 24 Million mark in February 2016, with the number of Australians over 65 sitting at over 3.5 Million, equating to 15% of the population (6). Life expectancy for Australian women has increased to exceed over 85 years of age. (7)
Our ageing population and Government reductions on health, aged care and the pension means it has never been more important to plan for retirement. A low superannuation balance and reliance on the aged pension could see many older women in Australia living in poverty.
These are sobering statistics for Australian Women, however there are strategies that women can implement to boost their savings in retirement.
Seeking expert financial advice now could make an enormous difference to the lives of many Australian women. Your financial adviser can help you make the most of your retirement savings by creating a retirement plan specifically for your personal circumstances.
At Cotter Financial Services, we encourage all women to take the pledge, and take control of your finances to create financial independence. For financial planning assistance including appropriate strategies for retirement and superannuation please contact Cotter Financial Services on P: (07) 3333 2610
The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.
Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.
2 https://www.wgea.gov.au/sites/default/files/Gender_Pay_Gap_Factsheet.pdf – Sept 2015
5 A study of Self-managed Super Funds – Women and SMSFs – www.smsfassociation.com 6 http://mccrindle.com.au/the-mccrindle-blog/24-facts-about-australia-at-24-million