Super in a volatile environment

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07.Women and super

There’s a big divide between the retirement nest eggs of men and women; the Association of Superannuation Funds of Australia estimates that the average superannuation payout for men in early 2008 will be $155,000, compared with $73,000 for women. And women generally live longer than men, compounding concerns about this shortfall and its impact on retirement living standards.

There are several factors that contribute to this situation: women often earn less money and are more likely to take a career break to look after their children. And while women are out of the workforce and not being paid, they don’t receive regular 9% superannuation guarantee payments.

The Australian Institute of Super Trustees (AIST) supports the introduction of a maternity super guarantee payment by the government.

“The average seven-year career break taken by most women is one of the main reasons for their low super balances on retirement,” AIST says. “For a 30-year-old female with an annual salary of $50,000, taking a career break of six years could cause them to miss out on $77,000 in retirement savings at age 65.” (That’s based on annual investment growth of 8%).

In the absence of paid maternity leave, AIST supports the introduction of a superannuation baby bonus of up to $4000, to be paid into super (it’s based on 9% of the average salary over 12 months). AIST is also calling for an extension of the co-contribution scheme and a lift in age pension payments.

In the meantime, what can women do to boost their super balances? Check Boosting your fund for ideas.

Note: New ‘super splitting’ rules mean that in a divorce settlement superannuation can be treated like other assets, so one spouse could be entitled to a share of the other’s super.

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