As the world celebrates International Women’s Day and all that women have achieved, it’s a good opportunity to take stock. Women have undoubtedly come a long way in terms of workplace participation, equal pay, and financial independence, but there is still some way to go.
These days, women make up almost half the workforce although 43 per cent work part-time. Women also make up over half of university enrolments (58.4%), but on graduation they earn $5,000 less than similarly qualified men.
By the time retirement comes around, women face a triple whammy. Not only are women likely to earn less than men and take time out of the workforce to care for children, but they can also expect to live longer than men, so their retirement savings need to stretch further.the first time the car is both held and used is on or after 1 July 2022.
Watch the gap
The Albanese Labour Government recently announced they will be delivering on an election commitment to help close the gender pay gap at work. The bill is aiming to fast-track the progress and the proposed changes will be a key steppingstone to achieving company transparency and accountability.
The bill will publish gender pay gaps of employers with 100 or more workers – a key reform to drive transparency and action towards closing the gender pay gap. Reporting will begin in 2024, using data already provided by employers. Companies’ gender pay gaps are to be published on the Workplace Gender Equality Agency website, for all to see – so be sure to watch that space and check where your employer sits.
Pay transparency provides knowledge and proof for workers to spot when pay discrimination is occurring. When you can see that you’re not being paid fairly, having that data freely available means that you and your colleagues can back yourselves when negotiating for pay rises and fair wages.
The average superannuation balance for a woman at the time of retirement is 52.8% less than for a man. Women also make up 55.6% of people receiving the pension. One in four women retire with no super at all and more than 80 per cent retire with inadequate savings to fund a comfortable lifestyle.
According to the Association of Superannuation Funds of Australia (ASFA), single retirees need an annual income of $43,787 to live comfortably, while couples need $61,786. This is considerably more than the Age Pension, which currently pays around $24,000 a year for singles and $36,000 for couples.
This gap is particularly significant for single women who don’t have the added safety net of a partner’s super. On average women live longer than men so they have to stretch a smaller amount of super longer.
So how can women close the gap?
Practice money mindfulness
People who have limited experience with investing often feel too embarrassed to ask questions, but there is no such thing as a stupid question. So, talk to us about strategies such as the following to help you get ahead.
Start building your nest egg early
This is even more important if you are planning to take time out of the workforce to have children, study, or travel. While you are working full time and have disposable income, consider making voluntary tax-deductible contributions up to $27,500 a year (including your employer’s Super Guarantee payments). You can also make after-tax contributions of up to $110,000 a year.
Individuals returning to the workforce after a break may also be able to make catch-up super contributions. If eligible, you could carry forward unused amounts of your annual $25,000 tax-deductible limit for up to five years.
A sacrifice that pays
Earnings on your savings inside super are taxed at 15% but remember to keep an eye on your $25,000 contribution cap which includes your employer’s Super Guarantee payments.
Work as a team
Choose your super with care
We work closely with women by providing financial education and guidance to assist women to gain financial independence.