Make sure you retire with enough Superannuation

As a female, I find it really concerning and confronting to see the statistics of women over 55 in Australia struggling financially. Women over 55 are now the fastest-growing homeless population in Australia. And many of these women have found themselves in this position following marriage and relationship breakdowns later in life, and low superannuation balances.

On average, women are retiring with half the superannuation of men, and women are generally living longer than men so that’s a real problem. So why is there that superannuation gap?

Women are more likely to move in and out of paid work to care for children, so they are more likely to have unpaid work breaks. Women are also more likely to be engaged in casual and part-time work hence also resulting in a lower superannuation balance.

It also doesn’t help that women working full-time today earn 16% less than men due to the gender pay gap. So, it’s really time to take control. As a woman, it’s so important that you take control of your own financial future. A man is certainly not a reliable financial plan. It’s up to you to ensure that your future is secure.  I’m going to share with you four tips on what you can do now to improve your financial position in the future despite your superannuation balance.

Tip #1

Know your superannuation balance. It alarms me that less than half of Australians actually know how much super they have. So, get your latest statement, and check the balance. Also check, if you do have multiple funds, consolidate your superannuation funds into one account. This will save you a huge amount of money and ongoing fees and will ultimately mean that your money is working better for you.

If you’re not sure where your super is, find your lost super using the ATO online services through myGov or ASIC’s MoneySmart website. You can also calculate what your superannuation balance is likely to be at retirement age. This is also a good thing to do so that you roughly know how much super you’ll have when you decide to retire.

Tip #2

Understand and manage your investment options in superannuation. Superannuation is your money and it’s your choice and your responsibility to decide how it’s invested and the level of risk your willing to take. You can decide whether you want high risk or low risk. Generally, if you’re a bit younger you can take on a bit more risk in your investments. If you’re a bit older, you might have to go for something with a lower risk.

If you are not sure about what investment strategy to choose for yourself, it’s a good idea to get some advice from a financial planner that can help you.

Tip #3

Actively grow your super.  The contributions from your employer are never going to be enough to support a comfortable retirement. It’s important to consider other options.  You can consider salary sacrificing a regular amount of your income into Super to boost your balance whilst reducing your tax. For example, by contributing as little as $20 a week for 30 years, you can add over $85,000 to your super balance, and only around $30,000 of this will come from your own pocket. This makes it really worth considering.

Tip #4

Invest outside of superannuation. Just like a man is not your financial plan, you also cannot rely solely on the pension or your minimum Superannuation to give you a comfortable retirement. Educate yourself on other investment options outside of super such as shares and property and make a plan to proactively and consistently invest a regular and consistent amount of your income so that you have the future that you dream of and the future that you deserve.

Shares are more flexible than property as they can be bought and sold in small parcels. However, they are a lot more volatile than property. Property investment, on the other hand, can be a great long-term investment vehicle which can also allow you to take advantage of capital gains and tax benefits arising from negative gearing and depreciation allowances, especially if you’re in higher tax brackets.

Educate yourself on these investment vehicles and find the one that’s right for you. Having your own investments outside of superannuation may also give you the freedom to choose to retire or cut back your work hours sooner. Rather than having to wait until the government says you can retire.

The main thing is that you take proactive control of your financial future, and as a woman, you need to make sure that you are going to have the future that you dream of.

I hope these tips helped you today. If they did, share them with family and friends that you think might benefit. Comment, I’d love to hear how you’re dealing with your superannuation balance and how you’re trying to get yourself ready for your financial future.