If you’re reading this, there’s a fair chance that you’ve heard this fact before: women generally retire with much lower superannuation balances than men. It’s something that the industry (and the generally public) has focused on for the last few years.
But there’s a problem with the way people have been talking about his. Too often, it’s oversimplified. Media commentators and ‘experts’ might blame the gender pay gap, or the fact that women are more likely to work part time. It’s difficult to discuss the problem with friends and family, too. Some still hold the (rather old fashioned) idea that most women rely on their partners for retirement income anyway. Especially for women with a partner and children, it’s almost taboo to discuss or think about a situation in which they’d have to live out their old age without any family support.
If you are a woman, or if you know a woman who’s close to retirement, it’s a good idea to be familiar with the risk factors. When you’re aware of what can keep a woman’s super balance down, you may be able to plan to avoid these hurdles. A new report from Per Capita, an independent think tank, has outlined some of the major contributors. And this time, the numbers are backed up by comments from thousands of women all around Australia.
The most common reasons a woman’s super account might lag behind her male colleagues is:
- Part time and casual work / self-employment
Women are more likely to take on part time or casual work during their lifetime, especially if they have kids.
- Inadequate Age Pension
The reason the Age Pension comes in to this is that it’s a major reason why many women don’t pay attention to their super – they think the Age Pension will cover them.
- Gender pay gap
According to the Workplace Gender Equality Agency, the gender pay gap is still above 20%. That means women get lower employer contributions, and don’t have as much to salary sacrifice.
- No super at low pay levels
Women in casual work may not earn enough each month (at least $450) to get paid super.
- Carer responsibilities
Women are still more likely than men to take responsibility for the care of disabled, sick or elderly relatives.
- Unpaid domestic work
Although things are getting better, the women of each household still spend more time on domestic work (shopping, cooking, cleaning etc.) than the men.
- Age discrimination
Amongst other age-related factors, women may find it hard to get work later in life, when they most need the money to boost their super balances.
- Bad tax conditions
Tax concessions for super are slowly being scaled back. What’s more, the way marginal tax rates work mean that women with working partners who come back to work after having children may be at a disadvantage.