Women the ‘super losers’

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New research has found that women have an average super balance of $92,000 at retirement – that’s 40% less than the average male retiree, with $154,000. The new figures, from Roy Morgan Research, fall short of ASFA’s recommended super standards ($22,539 a year for a modest lifestyle, $41,090 for a comfortable one).

"Yet to generate this $40,000 per annum in retirement for a comfortable lifestyle, most women will need to have around $500,000 in retirement savings (today’s dollars)," ING Direct chief operating officer Anne Myers told RateCity.

The research shows the gap between genders starts to form in the 30-34 age range. The decline in balances for women also starts earlier than for men, suggesting that women are retiring earlier and are beginning to draw down their funds at a younger age than men.

This problem is further exacerbated by the current gender gap in superannuation knowledge, engagement and attitudes, as revealed in the Suncorp-ASFA Super Attitudes Survey 2012.

The Suncorp survey revealed that taking just two years out of the workforce to have children can leave women up to $50,000 worse off in retirement.

Suncorp calculated the ‘super baby debt’ for women who take two years out of the workforce, based on salary:

  • $65,000 salary = $28,000 super baby debt
  • $85,000 salary = $36,500 super baby debt
  • $115,000 salary = $50,000 super baby debt

Researchers at Suncorp Life found that to make up the "baby deficit", women needed to make an additional 1% super contribution for every two years out of the workforce, for the rest of their working life.

Adrienne Rush, CFP at Bendigo and Adelaide Bank runs workshops to help educate women on their financial needs. She provides some pointers on how to increase the financial literacy of women:

  • Financial planners need to be fully aware of the issue themselves – it starts with us!
  • Understand the bigger picture, your clients and their whole situation
  • Talking about financial independence with a couple is crucial so they are both on board
  • Women learn better in an intimate environment where they feel comfortable.

Rush also said:

  • One fifth of Australian female Small Business owners do not have a super fund
  • Fifty-three percent of female Small Business owners have no retirement plan
  • At 65 the average woman’s super balance is $112,000
  • A 5 year career break means $45,200 less in savings than taking no career break
  • A women who retires at 65 needs to save $55,300 more than a man due to her increased longevity