‘Women and super – it’s time to plan ahead’

Written by Ronald Pratap

on June 14, 2017

Gender equality in enshrined in Australian law, however one area where women are falling short is their ability to save for retirement. So much so, in fact, that at around $190,000, the average super balance for women at retirement is around two-thirds the amount of men[1].

There are many reasons for this, including the gender pay gap and the tendency for women to take time out of the workforce to raise a family. When women do return to work often it’s on a part-time basis, in lower-paid jobs or they have missed out on promotions.

Blessed with longer lives – around three years on average for those turning 65 this year – women also face the extra financial hurdle of needing more savings, if anything, to cover their full retirement.


Closing the gap
Despite taking positives steps to boost their retirement savings when they do return to the workforce, women are often too conservatively invested to close the retirement gap to men, according to a global survey of more than 34,000 investors by investment firm, BlackRock[2].

The survey found that on average, women keep 68 percent of their portfolio in the relatively safe investments of cash and cash equivalents compared to men who allocate 59 per cent of their portfolio to cash.

Women were also less inclined to take risks with their investments with 28 per cent of women saying they would take on higher risks to achieve higher returns, compared with 45 per cent of men.

The legacy of men typically making household financial decisions has also fostered a gap in financial literacy, impacting the confidence of women to make positive financial decisions. For women aged 55 – 64, just 46 per cent are interested in investing, while among Gen Y women the figure is just 36 per cent. Women, instead, tend to focus more on savings related behaviours such as avoiding overspending and managing debt, the survey found.

The good news is that, despite these challenges, the survey uncovered several key habits of women who were on track to meet their retirement goals. These include:

  • spending time on their investments – up to seven hours per month
  • making retirement saving a priority
  • diversifying their portfolio, holding more shares and less cash
  • seeking financial advice


Tips for healthier super
No matter whether you’re a man or a women, here are some steps proactive, positive steps you can take to build and protect your financial security.

  • Salary sacrifice a little extra into super, remembering that it’s taxed at up to 15 per cent for most people, a little can go a long way.
  • Take advantage of the Government super co-contribution. If you earn under $51,021[3] and make a post-tax contribution of $1,000 or more, the Government may chip in up to $500.
  • Make sure the investment option you have in your super is the right option for you. Looking at this early could help to give better long term outcomes.
  • Consolidate your superannuation accounts into one to save on fees and insurance.

 

Still unsure of what financial decisions to make? Or just wanting to make the most of the opportunity that this time of year brings? Either way we can help. Get in touch today to arrange a review. Fill out the contact form or call us on 02 9188 1547.

 

 

 

The information is general in nature and does not take into account your personal objectives, needs and financial circumstances. You should consider the appropriateness of the information, having regard to your personal objectives, needs and financial circumstances. This information is not to be construed as personal advice, and should not be relied upon as a substitute for professional advice.

 

 

[1] https://www.melbourneinstitute.com/downloads/hilda/Stat_Report/statreport_2016.pdf

[2] http://blackrockinvestorpulse.com/women-investors/

[3] 2016-17 financial year figures

Ronald Pratap

Principal Financial Planner at RP Wealth Management | Financial Planning l SMSF I Insurance l Property Advisory. Our purpose is to provide our clients with sound advice and direction to assist with their financial affairs and help them make the best choices in achieving what is important to them.

Latest Posts

What concession cards are available for seniors and pensioners (1)

What concession cards are available for seniors and pensioners?

September 24, 2024
Financial literacy for kids

Financial literacy for kids

September 24, 2024
Can I receive multiple payouts from different insurance policies_

Can I receive multiple payouts from different insurance policies?

August 14, 2024
What Clients Are Saying About Our Financial Planning Services
We've Been Featured In
Industry Recognition

TAL Rising Star Financial Planning finalist 2016

RI Advice Excellence award Finalist 2014

One of the 50 Most Influential Advisers 2021