BY CANNA CAMPBELL
On average, men retire with 36% more money in their superannuation than women. Closing the inequitable superannuation gap between men and women requires deep systemic changes, but there are practical steps women can implement to make positive financial differences in the long-term. To resolve the imbalance, we need to identify the underlying issues that led to this inequity.
While these statistics can seem daunting, it’s never too late to start building a more secure future. Here are tips that could help shift your financial trajectory, so you can achieve financial freedom.
- Budget in your missing employer contributions – if you are reducing your workload to part time, try replacing (or as much as your budget can afford) the portion of superannuation you are missing out on. If you’re going part time, this can be done via salary sacrificing. If you decide to step out of the work force, utilise after tax contributions, but be aware of annual financial year caps and accessibility rules.
- Make sure your super is properly invested for long term growth opportunities – your superannuation is not your retirement “savings” account but your retirement “investment” account. The money should ideally fund your living expenses throughout retirement. If you have the benefit of time, you could make sure you are invested within your risk profile and prioritise long-term goals. For many people, this might mean stepping out of the default balanced option and selecting investments that provide more enduring growth or even high growth risk (make sure you understand the risks of volatility). This could help maximise capital growth and income opportunities for the future.
- Keep it simple – ideally consolidate your superannuation accounts so that you are minimising fees and maximising efficiency. Whilst the fees may seem small, the cumulative costs could total within the thousands on your financial portfolio value. However it is essential, especially if you are considering consolidating your superannuation accounts, that you are mindful of any changes in fees, expenses incurred with consolidating (such as tax, brokerage, time out of the market etc) and any benefits attached to your old superannuation accounts, such as personal insurance policies (for example Life Cover, TPD or Income Protection). You never want to cancel an account or policy without them being replaced and in force, before you make any formal and final changes. You can also use this opportunity to search for any missing or old superannuation accounts. Consolidating them could make you feel more in control and organised, as you have more clarity on your overall retirement portfolio and the progress you’re making towards your retirement goals. Speaking with a licensed and qualified Financial Planner, who can give you personal product advice, based around your own needs, goals, situation and time frames can help give you even more clarity and direction.
- Get advice – most of us feel overwhelmed by our personal finances, so it is easy to panic and brush it under the rug. However, this results in valuable time being wasted and lucrative prospects for building wealth gradually slipping by. A licensed and qualified Financial Planner can analyse your situation and identify other areas that can benefit your retirement goals. This could include exploring whether you are eligible for a super co-contribution from the government, or carry forward unused concessional contributions and other alternative avenues to boost your immediate and long-term financial security.
- Stay informed – real life obligations and responsibilities can be overwhelming, but this is never an excuse to bury your head in the sand. Your financial wellbeing should be high on your priority list. Reviewing your super on a regular basis to make sure that it is invested correctly, contributions are being paid punctually and how the returns are looking will help ensure your retirement goes smoothly, especially when you include some realistic financial goals to benchmark.
While legislative reform is necessary to create a working system that is more productive for women’s retirement, you also have the power to minimise losses, maximise opportunities and take control of your financial future. When you build financial literacy and have real financial goals to work towards, you have the capacity to make more informed decisions that can be the difference between living an abundant retirement, or one with anxiety.
Canna is the founder of the financial media platform, SugarmammaTV, and author of financial advice books The $1000 Project and Mindful Money. She comes from a corporate finance background and is a licensed financial planner. SugarmammaTV provides educational content that helps make money and finance more approachable. She is also the founder and director of financial planning firm, SASS Financial Services.
This article was prepared in partnership with ING. The information provided in this article is of a general nature only and does not consider your personal objectives, financial situation or particular needs. The views expressed in this article are provided independently by Canna Campbell, a Financial Planner and an Authorised Representative of Wealthstream Financial Group Pty Ltd (AR 000309372) featured in the article. ING makes no warranty as to the accuracy, completeness or reliability of the information, nor does ING accept any liability or responsibility arising in any way from omissions or errors contained in the content. ING does not recommend any products, services or financial strategies mentioned in this article. ING strongly recommends that you obtain independent advice before you act on the content. Canna Campbell uses ING’s trademarks under arrangement with ING. ING is a business name of ING Bank (Australia) Limited, ABN 24 000 893 292, AFSL and Australian credit licence 229823.
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