Closing the superannuation gap

On average, Australian women are retiring with just over half as much superannuation as their male counterparts. This disparity in super balances is made even more problematic by the fact that women have significantly longer life expectancies, meaning that many women have to live off less money that is also stretched over a longer period. There are many factors that contribute to women’s lower levels of superannuation savings. Superannuation contributions are based on lifelong income, meaning that as women typically earn less than men, their superannuation contributions are also lower.

Additionally, women are more likely to have taken time off from the formal workforce in order to look after children or elderly relatives. Statistically, women are also more likely to be the head of a single parent household, which results in a significant financial burden that makes extra superannuation contributions challenging. While the gender-based superannuation gap is slowly closing amongst younger generations, Australian women continue to earn 17% less than men. The fact that many women are engaged in part-time employment or do not earn enough to qualify for the compulsory employer contributions is an additional barrier.

Here are some preliminary steps that women can take to address their superannuation needs:

Work out how much you have
The first step in taking control of your superannuation is to ensure that all of your super has been consolidated into a single account. Having your superannuation spread between multiple accounts means that you are most likely paying excess fees. Once all of your superannuation has been consolidated, you can see how much you have and start planning accordingly.

Make extra contributions
If it is possible, you should start making extra contributions towards your superannuation. Even the smallest of contributions, concessional or non-concessional, can make a world of difference when the time comes to retire. The earlier you start making extra contributions, the more your balance will accumulate over time as it attracts investment returns.

Discuss options with your partner
If you have a partner, you should have an open and honest conversation about what actions you might be able to take to make your superannuation more equitable. For example, if you are taking time off from work to care for your children you could ask your partner to contribute to your super account as well as their own. This option comes with some attractive tax offsets.


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