We’ve come a long way, but there’s still more to be done
It’s International Women’s Day today. What a good day to take action on improving your super balance!
Wondering how the two could possibly be related? Well, while it’s true that women’s retirement savings are starting to improve in leaps and bounds, there is still a long way to go in bringing women’s average retirement savings closer to that of men’s.
On average, women still have around $113,000 less in super upon retirement than men1. And to make things worse, women’s age expectation is higher than men’s, so their savings need to be stretched even further.
There are many reasons that women’s super balances are usually lower than their male counterparts. One of the biggest factors is the likelihood that women can take extended time off work to care for families. There are other issues at play as well, such as the gender pay gap.
So what can we do about it?
There are so many great avenues women can take advantage of to help boost their super savings – even if they do take time out of work to care for family. So make it your goal to keep the ball rolling, and look into one of these methods to help boost your super!
Contribution splitting and spouse contributions
The difference a break from work can make to your retirement savings is significant.
A great way to manage this gap in your super payments is to ask your working partner for assistance. If you are earning less than $37,000 (including super) per year (which is likely if you’ve taken time off for maternity leave), your partner could qualify for a $540 tax offset by contributing $3,000 to your account.
You can also look into contribution splitting, and have your spouse contribute up to 85% of their super contributions into your account at the end of the financial year. You can read more about this strategy here.
Take advantage of incentives
There are a few Government incentives you can take advantage of if you have a low-income – for example, if you’re taking time off work or working part-time. If you earn less than $37,697 and make a contribution to super, the Government will match your contribution by 50%, contributing up to a maximum of $500 to your account. You can read more about the Government Co-contribution here.
In addition, the Low Income Superannuation Tax Offset can help to reduce the tax you pay on your super. If you earn less than $37,000, the Government will refund the tax paid on any contributions you, or your employer, has made to your super (up to a maximum of $500).
Make sure your super is growing altogether
Multiple super accounts can mean multiple fees, and if you currently have more than one super fund, it’s likely your savings are being reduced by unnecessary fees. Combining your accounts into your Intrust Super account can reduce your fees, especially if you have insurance with each of your accounts. It’s easy to find and combine your extra super accounts – simply log in to MemberAccess and click the ‘Find my extra super’ banner2.
Catch up contributions
Super contributions that you make before tax – for example, through salary sacrificing – are capped at $25,000 per year. However, since 1 July 2018, any money you have left over in your annual before-tax contribution cap can be rolled over into the following financial year. This leftover amount will be available for you to use for up to five years.
So while you may not be financially able to make extra contributions to your super right now, you could have more opportunity to do so a few years in the future.
Review your investments and returns
Taking an active role in choosing where your super money is invested can make a huge difference. Super funds offer a variety of investment options for your savings, but if you have not made a choice, it’s likely your super has been invested in the Balanced fund. Intrust Super provides members with a number of investment options, and some may suit your needs more than others. You can read more about our investment options here.
If you’d like to have a closer look at your options, we have some online tools to help you develop an understanding of your risk profile and generate some investment recommendations. Just log in to your MemberAccess account and click the ‘Financial advice’ tab.
If you would like to receive some additional advice about your investment options, the financial advisers at Intrust360° can help. You can give them a call on 1300 001 360 or book an appointment online.
Take action on your super today!
While there is still much that needs to be improved when it comes to women’s super, there are avenues we can all consider to help boost women’s balances. So this International Women’s Day, why not take the first step towards improving your super, and start ticking off some of these tips?