Women Retire with 47% Less Superannuation Than Men - Women's Health

Women Retire with 47% Less Superannuation Than Men

Super strategies for women.

by | Oct 11, 2021

By Heather Dawson, Chief Experience Officer at Active Super

 

Money, money, money. We hate talking about it (ever seen a room silenced because someone asked about another person’s salary?) and dealing with it even more.

But, aside from securing our futures, getting a handle on your dollars and cents is especially crucial for women: 40% of older, single retired women live in poverty and experience economic insecurity in retirement, according to Women in Super.

Yep, there is a sizeable wealth gap that exists between women and men when it comes to their super. Despite the conversations and greater advocacy around equal pay, women currently retire with 47% less superannuation than men.

Research has also found that:

One in three single women over 60 live in poverty in Australia

Women aged 55 and over are the fastest-growing group of homeless Australians

Women earn less, on average, than men and often have time out of the workforce

Generational Challenge

This is a generational challenge, and we must advocate for positive changes to help women retire with the dignity they deserve. This takes both increased advocacy and greater empowerment for women.

In addition, to further the efforts made towards gender pay equity there are several ways to make a greater impact.

For example, women (and men) across all income levels who take time off work to raise children should get a superannuation tax rebate to ensure they don’t miss out on making extra contributions to their retirement, according to KPMG.  

Outliving Your Super

Women also live longer than men on average. As of 2019, Australian women live an average of 4.1 years longer than Australian men. This means that women’s retirement funds need to last for a longer period of time. Allowing older women the opportunity to ‘top up’ their superannuation, if they have the financial means to do so, would have a positive impact.

While we’ve discussed the challenges facing women in building their super, women deserve prosperous retirements – something they can achieve with the right knowledge and tools.

Super Strategies

1. Set your own goal. 

There’s no magic number for how much someone needs in super when they retire, other than discovering what’s right for you. Setting your own personal goal can be both motivating and liberating. Check out the tools on your super fund’s website or the Government’s free Money Smart Retirement Planner. 

2. Know the magic of compounding

Compounding means you receive interest on both your principal investment and your interest. In other words, you receive interest on top of your interest. Over time, the longer you save and invest, the higher the amount of compound interest. Compounding helps your super grow.

3. Build your confidence (and your super) through advice.  

Many super funds offer advice, some of which comes at no extra charge, to help you navigate salary sacrificing, choosing the right investment strategy or choosing the amount of insurance to protect your loved ones.

Through advocacy and empowerment, we can bridge the wealth gap and help women retire with financial security to live their best lives.

 

Heather Dawson is the Chief Experience Officer at Active Super, one of Australia’s leading responsible investment super funds. She has 25 years of experience in the US and Australian financial services and superannuation market.

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