Having enough money in super is a major issue for all Australians but women fare worse than men for a few reasons, so here’s some tips to help you boost your retirement savings.
Much to our disappointment and frustration, the gender pay gap in this country is alive and well. On average, over a lifetime, a women will be paid $600,000 less than men.
This has a direct effect on our retirement account balance and puts us behind our male counterparts from the get-go.
On average, women end up retiring with approximately $100,000 less superannuation than men.
Add to this the fact that women take career breaks to have children, often out of the workforce or working on a causal or part-time basis for up to eight years after having children.
With an aging population and pressure on government to fund the safety net of the age pension, it’s more important than ever for women to be taking a good hard look at their financial futures. We need to reposition our attitudes around wealth creation and act while we can.
Boosting your balance
Despite the challenges outlined above, not all is lost. There are a few simple things you can do now, that will make all the difference to our retirement.
1. Get educated and get help. Many of us are indifferent when it comes to our superannuation, or we simple don’t understand it.
Self- directed education with tools such as ASIC’s MoneySmart is a fantastic starting point, and if you can afford it, it’s wise to get advice from a professional financial planner early on.
If you don’t feel comfortable with a professional planner, get a financial mentor. Just like our careers, having a financial mentor who can guide you, challenge you and support you, will help you grow and develop when it comes to wealth management.
2. Make a plan. Sit with a financial planner or your financial mentor to set out your life goals and how you plan to achieve them from a financial perspective – both short-term and longer-term. It will allow you to spot problem areas and course correct well ahead of time.
Ensure you review this regularly as your life changes to keep it relevant and up to date.
3. Contribute extra. The 9.5 per cent superannuation guarantee isn’t enough to build healthy retirement savings.
Consider salary sacrificing, which not only increases your account balance but is also a tax effective way to save for retirement. Or, when you get a pay rise, save half into super – you won’t even miss it!
4. Avoid procrastination risk. For many of us, retirement is still a long way off.
But the magic of compound interest means topping up your superannuation regularly throughout your life – especially if you continue to do this during times when you’re out of the workforce – will make a significant difference when you’re ready to retire.
5. Create financial equality in relationships. For those of us in relationships, especially long-term relationships, that have joint accounts, it’s important to maintain financial equity.
Be across the decisions being made, particularly those that are an investment for the future, and make sure you have a say in where your money is being invested.
Regardless of your situation or age, it’s important to take an active role when it comes to the management of your retirement funds. In my opinion, the sooner the better.