Women Facing Retirement Glass Ceiling

15/12/2014   by Nathisha Paramasivam, Associate Financial Planner and Authorised Representative

Women have come a long way over the years in terms of their earning power in the workforce; however they still have a long way to go before closing in on the gap between male and female retirement savings.

Due to a number of different factors, including income disparities and the fact that women are more likely to move in and out of paid work to care for family members, retirement savings between men and women are significantly different. A recent report¹ by the Association of Superannuation Funds of Australia states that in 2011/2012 the average superannuation balance for women was worryingly almost 46% lower than that of men’s.

According to a media release from Westpac Bank in December 2013²;

1. There was a $121,200 gab between median superannuation account balances for women and men (aged 60-64) in Australia
2. 51% of those surveyed expected to have ‘saved more by now’ for their retirement

The Westpac report goes on to note that research has identified the average 60 year old Australian woman would need to work an extra 25 years in order to retire with the same superannuation account balance as her male counterpart.

As the current superannuation system in Australia is linked to paid work, it overwhelmingly disadvantages women who are more likely to be primary care givers in the family. Unfortunately, women also tend to earn less than men and are more likely to be engaged in casual and part time work, contributing to the gender gap in retirement savings.

Closing The Gap and Planning for Retirement

We are all guilty of putting off planning for our retirement at one stage or another. However it’s essential for both women and men to ensure they appropriately prepare for life beyond work.

For women, it is even more relevant to start planning for retirement sooner rather than later given the various factors that continue to contribute to an evident savings gap.

Sometimes retirement planning can start with just having the right attitude.

Tips For Building Wealth For Retirement

The first step to building wealth for your retirement is to make an appointment with a qualified and experienced Financial Adviser who can assist in building an appropriate Financial Strategy specific to your individual goals and needs. Further to this, there are simple steps you can take to ensure you are not left short come retirement time.

Below we detail our top six tips for you to make the most of your superannuation balance in the coming years:

1. Have the right attitude; thinking about retirement may not be your top priority, but it’s in your best interest to make it. Have the outlook that no one (including the government) is going to take care of you better than you will yourself. Be proactive and make small changes along the way to safeguard your desired retirement lifestyle.

2. Be clear about your retirement goal; when do you want to retire? Do you want to maintain your existing lifestyle? Do you want to travel more? Dine out more? Do you want more or less of the income that you’re on now? Do you want to live off the income of your assets or eat into the capital of your investments? Making sure all these questions and more are answered makes planning for retirement less daunting.

3. Establish a budget; once you establish how much money you will need in retirement, you will be able to establish a current budget to ensure you are saving an efficient amount of money to meet your desired financial goals. Once you set up a budget, it’s of course important you stick to it.

4. Be debt free! The last thing you want hanging over your head when you retire is debt. Have the attitude to clear all your personal debt before you retire so you don’t have any liabilities eating into your retirement income.

5. Explore tax benefits; there are many tax initiatives involved with superannuation contributions that can certainly work in your favour, so explore these options. Talk with a professional Accountant or Financial Adviser who will be able to assist in this regard.

6. Build wealth; it seems obvious, but the more wealth you build now, the more financially comfortable you will be in retirement. Having clear retirement goals and an appropriate Financial Strategy in place will help you work towards your particular wealth building initiatives. Whether your desired wealth creation includes property, shares, cash or other, there are many different strategies that can be tailored to your individual circumstances.

Unfortunately, it could be many years before the gender gap in retirement savings is bridged. However in terms of your own personal approach and attitude, you have complete control of your retirement planning. Don’t let anyone else dictate your superannuation balance; make an appointment with a Financial Adviser today to ensure you can live the life you choose in retirement.

If you would like to discuss any of the topics raised in this article, or would like to speak with someone with regard to any financial matter, please feel free to call our office on 1300 726 082 and ask for a Financial Planner or Accountant who will be able to assist.

¹ http://www.superannuation.asn.au/policy/reports
² http://www.westpac.com.au/about-westpac/media/media-releases/2013/10-december


John Hopkins Financial Services Pty Ltd is a Corporate Representative of WealthSure Financial Services Pty Ltd Level 1 190 Stirling Street PERTH WA 6000 ACN:130 288 578 AFSL:326450.

General Advice Warning: This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.

Any tax advice provided in this document is incidental to the financial advice provided, being unaware of, nor able to consider all aspects of your tax affairs. You should consult your own tax professional to confirm any tax advice provided is appropriate with regards to your total tax planning needs.

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