As a 26-year old, superannuation and planning for retirement have never been high on my priority list. I had assumed that a degree, full-time employment and ambition would surely guarantee a strong, financial future.
But attending the Women, Super and Wealth Summit yesterday in Sydney, made me realise the extent of my naivety. Financial freedom for women is not a born-right in Australia, and while the problem is starting to be acknowledged there is still a long and arduous road ahead.
Libby Lyons, the head of the Workplace Gender Equality Agency and one of the panellists at yesterday’s conference, spoke to some pretty stark statistics. The gender pay gap is real. Women in full time employment earn on average 23.1 per cent less than their male counterparts and this, combined with interrupted work-patterns for many women in Australia, is leading them to retire on average with 46.6 per cent lower super balances than men.
So, what can young women do to protect themselves?
Seems obvious, right? Ambivalence and apathy towards superannuation is rife among many millennials, but we need to get more savvy. As Sally Loane the CEO of the Financial Services Council said yesterday, “we wouldn’t let our employers choose our bank account, so why would we let them choose our super fund?” It’s hard to think of superannuation as cold, hard cash when we know we won’t be seeing it for the next 40 years, but we’ve got to shift that mindset. Learn about your super fund and why it’s the best choice for you, download ASIC’s Money Smart App and get your head around proposed government changes to superannuation.
Spread the word
“It’s not common or awful to talk about money, it’s actually your financial freedom,” Loane says. Speak up, talk to friends and family and start using the hashtag #savinggirls. The status quo can only be changed if millennials are engaged and prepared to be loud about it.
Earn as much as you can, as early as you can
Sandra Buckley, the Executive Officer of Women in Super had this advice for young women: “Do as much as you can.” Try and earn whatever you can and make whatever contributions to super you can, before you get married. Statistically, that’s going to be your highest earning period.
Starting a business? don’t forget about super
“A growing number of women are setting up their own businesses” says Buckley. But currently, there’s no required super contributions for small businesses in Australia. Where possible, female entrepreneurs should attempt to make regular contributions to their super.
Young women can be risk adverse. For this reason, when we think about financial security, we lean towards budgeting rather than investing. “Have the confidence to invest” says Linda Elkins, Executive General Manager of Colonial First State. That extra pair of shoes you choose to buy will not be your undoing. Be brave, be ballsy and have a look at where you could invest your money wisely.
Ultimately, there are deep seated inequalities in Australia which need to be addressed if we’re ever to reach gender parity. While we start to work through the mess, it’s crucial that young women stay informed and engaged about superannuation and their best shot at financial freedom.
In the words of Sally Loane, “girls can do anything, but we need to be sharp about making them financially independent.”