Women urged to take steps over retirement gap

WOMEN retire on average with less than half the amount of superannuation that men have, prompting industry figures to urge women to take action now to safeguard their future wellbeing.

The most recent Association of Superannuation Funds of Australia (ASFA) numbers show men retire on average with $292,500, compared with $138,150 for women. Longer life expectancies also mean women’s savings must stretch further.

With this double gap, there is a real danger that women will be left short later in life, according to Claire Higgins, chair and independent director of REI Super.

“Women over 55 are the fastest growing group of homeless people in Australia,” Ms Higgins said.

“The Australian Institute of Health and Welfare reports the number of homeless older people aged 55 and over seeking help has risen 44 per cent since 2011-12, with the majority of this group being women.”

Ms Higgins says with rising rates of relationship breakdown, women need to take charge of their own situation, rather than relying on partners’ savings.

She provides the following five tips to help women maximise their future comfort.

1GET ADVICE

Most super funds provide free personal financial advice for members. Depending on your age, you might need help optimising savings or even changing to a different investment risk profile as you near retirement.

2MAKE VOLUNTARY CONTRIBUTIONS

You can boost your super voluntarily by salary sacrificing, making after-tax contributions or by receiving spouse contributions.

To help non-working or low-income people increase their super balances, the ATO offers a tax rebate to spouses who make superannuation contributions on their behalf.

If your income is $40,000 or less, your spouse can make super contributions on your behalf and can claim an 18 per cent tax offset on those contributions up to the value of $3000 a year.

3FIND THE RIGHT INVESTMENT OPTION

Check the investment option selected for your super account suits your situation, risk appetite and retirement goals. A financial adviser can help with this.

4SUPER CAN BE SPLIT IN THE EVENT OF A DIVORCE

Parties are entitled to super, the same as with other assets like the home, valuables and investments. Family law allows super to be split under a superannuation agreement reached by the two people involved. If an agreement can’t be made, a court can determine the settlement.

5STAY CONNECTED WITH YOUR SUPER

Stay actively engaged with your super by logging into your account online, checking your benefit statements and ensuring your employer has been making contributions. Round up any old super accounts and consolidate them into one fund to save on fees and maximise growth.