It’s well known that women, compared to men, struggle to save for their retirement.
Earlier this year, the Australian Institute of Superannuation Trustees released a report with the Australian Centre for Financial Studies, which revealed a ‘flat-lining’ of women’s super balances in 2010 between the age groups of 38-42 and 43-47.
“There’s a clear flat-lining of women’s super that has remained unchanged for almost a decade. The super gender gap is still as large today as it was in 2002 because women are still spending five to six years out of paid work to raise children and they still earn, on average, nearly 20% less than men,” AIST CEO Reynolds said in a statement, commenting on the findings.
The survey showed that the average super balances in 2010 for men in the workforce aged between 58 and 62 years is approximately $210,000, while the average balance for women is about $95,000.
According to other recent research by the AIST into the retirement experiences of Australian women, Super-poor, but surviving, four out of five of the 800 women surveyed (aged between 50 and 80) had taken a career break during their lives to raise children, with the average length being 13 years.
While the current average career break is about five or six years, career breaks still have a huge impact on a woman’s ability to prepare for retirement, despite the introduction of various incentives and policy measures.
The research revealed that only a small proportion of retired women live on incomes above $50,000 and that more than half had incomes of less than $30,000. Additionally, 77% of the women surveyed were reliant on some form of age pension.
The statistics are alarming, and that’s why AIST CEO Fiona Reynolds recommends that women pay attention to their super savings early on in their career.
She says women should make more contributions to their superannuation now in anticipation of taking a career break down the track.
“The problem is, a lot of women come back [to work] part-time,” says Reynolds of the struggles women face following a period of maternity leave and why they need to prepare early.
Commenting on some women’s reliance on their male partner for financial security, Reynolds says “a man is not a financial plan,” and emphasises the need for women to make their own retirement plans. Now.