REST Industry Super have just released a research paper on the attitudes and expectations older Australians have towards retirement and superannuation. It showed all the expected gender differences – women have less super, less knowledge, longer working lives – but there were also a few surprises.
73% of working mothers (50+) have earmarked their retirement savings to help their adult children financially. Amongst those who are planning on supporting their children financially:
– 34% claimed they’d put this money towards paying their kids’ expenses (e.g. paying bills, paying off credit cards, etc.)
– 26% helping their children pay for a deposit on a house
– 26% funding university studies
– 18% organising to leave a significant inheritance
– 14% help their children afford a holiday
Many of the responses to the survey were the same or very similar for men and women, but there were a few stand out differences:
Agree with the statement “It’s better for inheritance to skip a generation (e.g. grandparents give their inheritance to grandkids)
– Men: 24%
– Women: 18%
Average amount received as inheritance from grandparents:
– Men: $83,452
– Women: $30,036
Average amount received as inheritance from parents:
– Men: $126,835
– Women: $93,692
This wasn’t due to more men inheriting money, the percentage of respondents who had inherited money from parents and grandparents was exactly the same.
Why are men inheriting so much more than women? It’s mystifying, maybe the sample size was too small, this certainly could be the case with the grandparents data, but the parents inheritance data looks fairly robust. Possibly people are leaving more money to their sons than daughters because they have a perception that their sons are responsible for a family, whereas daughters have a husband to look after them? Or maybe women are more likely to have had to borrow against inheritance while their parents were still alive and this isn’t taken into account in this data.
No other research (that we could find) has looked into gender differences in inheritance in Australia, so all we have for now is this and speculation.
However, given that 93% of women said that at least some portion of their inheritance will go towards funding their retirement, this is an issue that absolutely requires further investigation.
The rest of the gender specific differences in the data were about what you might expect:
Agree their current superannuation is adequate:
– Men: 45%
– Women: 35%
How much do you realistically think you will have for your retirement per year when you actually retire (average)?
– Men: $49,634 (18% don’t know)
– Women: $38,665 (28% don’t know)
Expect to provide for a comfortable retirement:
– Men: 45%
– Women: 34%
Total value of your superannuation (average)?
– Men: $275 646 (15% don’t know)
– Women: $171,101 (22% don’t know)
Expect to retire at the age you actually want to retire:
– Men: 69%
– Women: 58%
Expect to retire 1- 10 years later than you want to:
– Men: 24%
– Women: 36%
There’s a lot more data in the report, well worth digging into, but the take away lesson from it is that women need to learn more about superannuation and the systemic reasons for women’s retirement funds being so low need greater public debate, more work and genuine change.
(gender breakdown on survey response data kindly provided by REST Industry Super)
REST Industry Super’s Five ways to be super savvy
1. Be realistic
Review whether your current contribution rate will in fact deliver the lifestyle you want. If your vision includes regular holidays, luxurious hobbies and treating the grandkids, it may be time to boost your saving schedule.
2. Do your homework
Ignorance is less than bliss when it comes to preparing for your financial future. Make sure you understand how and where your super fund is investing your savings, and that this complements your other investments.
3. Tenaciously top up
Consider making additional contributions from your take home or before tax pay – particularly after a pay increase; when you’ll miss it the least. Even if it isn’t much, it could make a significant difference due to compound interest.
4. Be faithful to one fund
When it comes to super funds, the more the merrier rule doesn’t apply. Kick any extra memberships to the curb and consolidate; avoiding the unnecessary administration fees attached to each one. Before combining your super, you should check how it might affect your insurance in your other funds and if they have any exit fees.
5. Momentum is key
Make up for any time off work by making personal contributions to your super before, during or after a career break. There’s also the option for your partner or spouse to make contributions to your super on your behalf.