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Women and super - start young for a better retirement
24 June 2016
Having a hobby becomes increasingly relevant as we get older. Exercise is not a hobby. It’s a health necessity and although it can be absorbing, it’s not something you can do for hours and hours every day.
Reading suffers a similar fate.
Unsurprisingly, if you type into your browser ‘what hobby would suit me?’ up pop various sites tackling the problem.
One quiz recommended I make friendship bracelets, do orienteering, start painting water colours, or maybe take up photography and photo editing (photo shop).
The quirky questions and answers of the PlayBuzz quiz made me laugh out loud. Its final assessment of me was to “become a tea connoisseur and know all about tea” - an appealing outcome.
Aside from what to do with your time in retirement women must consider how they’re going to live when they get there.
The insidious gap between male and female superannuation, which has been the focus of many a media article and a recent Federal Senate Inquiry into Women's Economic Security in Retirement, starts when we first earn pocket money and continues right through our first jobs and careers.
In a Daily Nous article written by a married couple of American Philosophy Professors – well, one is an AsPro (Associate Professor), and I bet you can guess which one that is – gap creep is starkly described.
Beginning at the same time in the same job for the same salary, in less than a decade, John’s base salary significantly outstrips Carol’s (his wife). John and Carol are quick to point out they don’t see it as some sort of awful conspiracy but they do acknowledge the disparity highlights “the structural factors that can lead to lasting inequality in our profession. When our daughter was born four years ago, we were offered a single parental leave, which Carol took,” and the slide began from there.
In hindsight, the couple says Carol’s taking the leave was an “unwise” move: her “tenure clock was delayed, delaying her going up for full professor.” Needless to say, John faced none of this.
Again, they acknowledge, “there’s nothing particularly pernicious about this, but what start off as small disparities can grow exponentially and become self-perpetuating. As one partner makes more money for virtually the same amount of work, his or her work tends to be prioritized accordingly. Success breeds success, and before you know it, the thankless service work gets diverted to the less productive partner, who also happens to have the gender-typical traits of organization and meticulousness.”
The disturbing findings of a Westpac study around pocket money revealed that boys got paid more; took less time and mainly did ‘yard’ work.
When it comes to superannuation: women retire with just over half the super men have. Women live longer than men. What you may not know is that one in three women retire with no super at all.
The Senate Inquiry into Women's Economic Security in Retirement report makes 19 recommendations: “intended to help women increase their participation in the workforce and improve their superannuation savings as a means of achieving dignity and economic security in retirement.”
What can women do to make their futures more economically secure?
Start caring about your future when you’re young
Get your super in order – amalgamate all your accounts into one. Check on account keeping fees. Understand what you can do, try: Westpac calculator; BT’s superannuation tools.
Put extra in your super – perhaps salary sacrifice.
Get financially literate, try Westpac Davidson Institute or ASIC’s MoneySmart for tips.
Develop secondary income streams
Every pay or windfall: pay yourself first. Put the money into a separate savings account.
Get financial advice and think about buying equities, investing in property.
Talk to your partner
There may be opportunities for super co-contributions.
Talk to your employer
Closing the gender pay gap will help women.