With the gender pay gap slowly being addressed by industries across the nation, the Australian Tax Office has revealed that the biggest financial gap between men and women now sits in their super accounts.
For Australians aged 55-59, men had an average of $51,000 more than their female colleagues – the equivalent of over three and a half years of contributions for workers on the median national salary of $70,000 per annum.
From the moment women step into the workforce, they’re at a disadvantage when it comes to their super accounts, and the difference in retirement savings between men and women increases over time.
Top tips for women to safeguard retirement include:
- Check if spousal contributions are relevant to their situation. Generally, for women earning less than $37K per year, their spouse can generally contribute $3K each year to their super and receive a $540 rebate on tax.
- Consider ‘catch-up contributions’ after time out from the workforce. This allows workers with a total super balance below $500K, who haven’t used up their concessional contribution cap of up to $27.5K in previous years, to take advantage of it. This could have a significant impact on a woman’s super balance and anyone with a tax rate higher than 15 per cent could save a considerable amount of tax.
- Check your fees. Being in a low fee fund saves everyone thousands of dollars by the time they retire. The Australian Tax Office’s MySuper Comparison site is a great place to start.
- The earlier you start investing in your super – no matter where you’re at in your career – the earlier your money starts working for you, as your money will have more time to benefit from compound interest.
By: Renae Anderson, Manager, Select Advice, UniSuper