It can be 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. Many of these women have found themselves in this position following marriage and relationship breakdowns later in life.
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 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. It’s up to you to ensure that your future is secure.
Here are our four tips on what you can do now to improve your financial position in the future and retire with enough superannuation.
Tip 1 – Know your superannuation balance
It’s alarming 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, 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 aren’t 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
We cannot recommend relying 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 an amount of your income so that you have the future of your dreams.
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, can be a great long-term investment vehicle. They 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 with enough superannuation sooner. Rather than having to wait until the government says you can retire.
We want you to take proactive control of your financial future. And ladies, you need to make sure that you are going to have the future of your dreams.
If you need any help setting up a plan that works for you, leave your details below or contact us here. The team at Rise High are here for you!