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The super gender gap - by Megan McDougall

06 October 2011

For most Australians, superannuation is one of their biggest and most important financial assets, often second only to owning their home.

But unfortunately, super often seems to be a case of out of sight out of mind, and most people are not saving enough to support the lifestyle they desire in retirement, particularly women.

According to the peak body for superannuation in Australia, the Association of Superannuation Funds of Australia (ASFA), longer life expectancies mean many people now spend over a third of their lives in retirement - but often do not plan accordingly.

Women in particular are finding themselves retiring with superannuation balances well below what is needed, still on average retiring with considerably less superannuation savings than men.

“Women are still significantly worse off than men, despite almost 20 years of compulsory superannuation,” said ASFA chief executive officer, Pauline Vamos.

“A contributing factor to this hefty gap is the time many women take out of the workforce to raise a family. During this time they usually receive less superannuation or none at all.”

According to data from the Australian Bureau of Statistics compiled especially for ASFA, average superannuation balances for women in 2009-10 were $40,475, while men had an average balance of $71,645.

At retirement, average payouts in 2009-10 were $112,600 for women and about $198,000 for men.

“It is clear from these figures that most recent retirees will still need to rely substantially on the Age Pension in their retirement,” said Ms Vamos.

ASFA Retirement Standard figures show for a comfortable lifestyle, assuming part receipt of the Age Pension, the lump sum figures required at retirement are around $430,000 for a single and $510,000 for a couple.

There are a number of steps women can take right now however to help boost their superannuation balances and achieve the retirement lifestyle they desire.

Here are ASFA’s top tips for women:

•    Consolidate your super to avoid paying double fees.
Find the details of each of your accounts and track down any lost super. By consolidating all your funds into one, you can minimise your costs and avoid paying double fees. Start with the ATO’s Superseeker. (

•    Ask your employer to pay the Superannuation Guarantee (SG), even if you don’t meet the $450 a month threshold.
Urge your employer to continue paying the SG on your salary even if you only work a few hours a week or take time off for paid parental leave. It may only be a small amount but, especially if this period lasts a number of years, it can make a big difference to your super balance.

(Employers aren’t currently required to pay the nine per cent SG to employees earning less than $450 a month. The Government’s paid parental leave also does not require any compulsory superannuation currently be paid).

•    Push your employer to allow you to salary sacrifice into super.
Salary sacrifice can be a great option for boosting super and it’s something you can do at any time during your career, depending on when it best suits your financial position, to catch-up on your savings or get ahead before you take time off.

•    Do everything you can to scrape together the $1,000 additional contribution per year to receive the Government Co-contribution.
Women taking time off or reducing their working hours are in a great position to take advantage of this scheme if their annual income falls below $61,920. Provided you make your own voluntary contributions to your super, the Commonwealth Government will match your contributions $1 for $1 up to a maximum co-contribution of $1,000 for those on incomes up to $31,920.

(The $1,000 limit is reduced by 3.3 cents for each dollar of income over $31,920. The maximum co-contribution phases out at an upper threshold of $61,920.)

If you’re in a Self Managed Super Fund (SMSF):
•    Ask questions about how your money is invested, and what the fees are.
•    Insist you are involved in setting the investment strategy.
•    Find out what will happen if your husband or partner dies.

Want more information?
ASFA’s Super Guru website provides a range of practical information about superannuation to assist individuals, including specific information for women.

To see how much you would need to spend in retirement for the lifestyle you desire, try the ASFA Retirement Standard Calculator.