If you were disappointed that the Federal Budget didn’t have specific measures in it to close the gender gap in retirement savings, fear not!
We’ve asked Trenna Probert, the CEO of Super Fierce for her advice on the things you can ask your employer for to help you to supercharge and boost your super.
1. Ask them to pay super on your paid parental leave
The Government hasn’t made it compulsory in the Federal Budget, but your employer can choose to incorporate this into their remuneration packages.
Benefit at retirement: $13,000
2. Advocate for longer paid parental leave than legislation requires as stated in the Budget
Just one extra week of paid leave would add $5,000 to your retirement savings if you put that straight into your super and let it compound (based on the average Australian woman’s income). Want more? Every extra week is an extra $5,000.
Benefit at retirement: $39,000
3. Suggest they implement a retention bonus
If you leave their employment, most firms will face a recruitment cost of around 10-20% of your annual salary to replace you. So why not make a deal that if you come back after your leave period expires, they pay you half of that as a thank you? For the average wage earner, that’s a lovely $10,000 back to work bonus. It’s a win-win.
Benefit at retirement: $27,000
4. Super Clean-up for new Mums (or Dads)
Rather than an oversized greeting card, flowers and a gift certificate for a spa that as a new mum you will literally never have a chance to use, how about a super gift that will last a lifetime? Get your colleagues together and advocate for a company policy to ditch the kitsch and deliver a meaningful baby bonus.
Your employer could show genuine empathy and care for new parents with a free financial advice session to ensure your super is in shape before you get too busy to care. This one is a win-win-win; it will cost your employer much less than a retention bonus, and good advice will help you to make the most of your super.
For instance, finding a good super fund that will cost you less and/or perform better, or advice on how you can make the most of partner contributions to your super while you’re at home
caring for kids, or ensuring you have the right insurance in place.
Benefit at retirement: $160,000 (lowering fees to best in market) or $145,000 (0.5% per annum better performing fund)
The above mentioned calculations are based on the following assumptions:
- Average FT income per the ABS is $90,917 (2021)
- Retirement age: 67 years.
- Super Guarantee Contribution: Per legislation
- Tax in Super: Per legislation
- Inflation: 2.0%pa
- Wage Growth: 3.5%pa
- Fees: Average super fund fees today (1.17% of FUM + $92pa)
- Median age for first child: 29.8yo
- Median number of children: 2
- Average impact on income during children’s 0-5yrs of age: 70% fall
- Average impact on income during children’s 6-18yrs of age: 14% fall
Financy helps women become financially fearless and while we’re at it, we ensure that our members – individuals and organisations – are part of the solution to gender financial equality.
