How women can catch up
While everyone’s circumstances are different and require different solutions, super can be especially challenging for women. Time out of the workforce to raise kids and lower pay mean they retire with almost a third less super than men.
Women in Super (WIS) has been shining a light on the inequality of the system and is lobbying for change, calling for super to be paid on parental leave.
It advises young women to build their savings early with voluntary contributions to take advantage of compounding interest and cover future periods out of the workforce.
Josh Parisotto, chief advice officer at HESTA, says more than 80% of the fund’s members are women working in the health and community sectors.
“Many of our members have low super balances because they tend to work in insecure jobs like aged care, community services and early childhood education and care, which are typically lower-paid industries,” he says. “Women are also more likely to take long periods of time out of the workforce to care for others, not receiving employer contributions to their super.
“No matter where you are in your retirement journey, it’s never too late to start taking steps to help boost your retirement savings. There are simple steps you can take to boost your super, regardless of your balance.
“A great starting point are the three Cs – consolidate, contribute and check.”
A vital pre-requirement is having online access to your account so you can track it.
“Consolidating super accounts can help avoid paying unnecessary fees, although it’s important to consider the implications for any insurance cover you may have before consolidating,” says Parisotto. “Next, it could be worth considering, if you’re able, to chip in a little bit extra each week into super.
For most people this will be salary sacrificing, which can be a very tax-effective way to boost super and can make a difference over time.
“Finally, it’s important to check that your insurance cover and super investments continue to match your goals, risk appetite and time frame. This is crucial, especially if you are nearing retirement, as your needs may have changed.”
Seeking help and getting a plan in place can help build confidence. HESTA members can get expert help, at no extra cost, on things like how to invest as needs change and the best way to put extra into super through before-tax and after-tax contributions as well as lump sums.