Superannuation & women

Super - even more important for women

Women tend to live longer than men, making it even more essential that they accumulate enough superannuation to last through retirement.

But women face unique challenges when it comes to retirement savings. Lower pay, time out of the workforce to raise children, or running a single-parent household, can make it challenging to build a reasonable amount of super. However, some simple strategies make it possible for women to overcome these hurdles.

Super is good for you

Superannuation is a very tax-effective way to save for retirement. Your super fund pays a low rate of tax on contributions and investment earnings while you grow your nest egg. From age 60, you can withdraw your super tax-free.

Smart tip

The 2017 Hilda survey found that Australian women retired with an average super balance of $230,907 and men retire with about twice this amount.

Without super, many women must rely on the Age pension in their senior years. But the age pension is designed as a safety net and won't provide you with a comfortable life.

Taking time off paid work (e.g. to have a baby or care for someone) or working part time can impact your super.

Work out how working part-time or taking a break from paid work affects your super in retirement.

Retirement planner

Video: Women and super

Video about women and super

Super expert Pauline Vamos talks about the financial challenges that women face and gives her top tips on boosting your super.

Get to know your super fund

Your employer should be making super contributions on your behalf. These contributions will be equivalent to 9.5% of your salary or wages.

If you haven't given your employer instructions about the super fund of your choice, it's likely the contributions are paid into a MySuper fund your employer has chosen. This may not be the sort of fund you would prefer.

By law, you can normally choose your own fund and have your employer's contributions paid into that fund. If you have several super funds, it's a good idea to roll over or consolidate your super into your preferred fund. This will save you extra administration fees and make it easier to keep track of your super.

To choose a super fund, look at all the fees charged and the long-term average returns of the investment option you are comfortable with. Don't base your choice solely on past investment returns, as past performance may not be a reliable indicator of future performance.

When choosing a fund also consider the insurance it provides and the level of cover you require. For more information see insurance through super.

Options to grow your super nest egg

There are a number of ways to build your super. You cannot normally access your super before you retire, so only contribute money you can afford to set aside.

  • Ask your employer to pay part of your pre-tax salary or wages into your super fund. Making concessional, or salary sacrificed super contributions can be a tax-effective way to grow your super.
  • Make super contributions out of your own pocket. Non-concessional contributions, also known as after-tax super contributions, are not subject to the 15% contributions tax that can apply to other types of contributions. Depending on your annual income, you may also be eligible for government super contributions. It's an easy way to give your super a valuable boost.
  • Ask your partner or spouse to make contributions on your behalf. He or she may be able to claim a tax offset on the contributions made to your fund.

Work out the best way to add to your super.

Super contributions optimiser

Case study: Ajinder boosts her super savings

Mother looking at her superannuation online with her daughterAjinder was concerned that she didn't have much superannuation, and wasn't keen on the idea of relying solely on the age pension. She decided to take action to get her super under control.

'It struck me that I have 15 or so years until I retire. My super isn't great at present, so I've started adding a bit extra to my super each month by making payments out of my own pocket. It means I get the government co-contribution each year.

'I'm also going to ask my boss if I can salary sacrifice a small amount direct from my pay - and that means I pay less income tax. It's not a lot but my super balance should grow over time thanks to investment returns. Every extra bit I add now will make a difference to my retirement.'

Track down lost super

If you have ever held a part-time or casual job, or moved house, you could have superannuation invested in a fund that you've lost track of.

Use myGov to keep track of all your super and combine multiple super accounts into one, which will make it even easier to manage your super. More more information, visit the ATO's page on keeping track of your super.

Women's money challenges

Women's money challenges infographic thumbnail

Our women's money challenges infographic looks at the everyday challenges women face and the small steps they can take now that can make a big difference later.

Superannuation is very important to the quality of your retirement. By adding even small amounts to your super now, you will make a big difference later in life.

Related links

Last updated: 19 Mar 2018