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WOMEN are more pessimistic than men about retirement and more than three out of five say they will battle financially after finishing work.
A study by retirement planning firm StatePlus has found that 64 per cent of women say they will struggle to achieve a comfortable retirement lifestyle, with Australia’s wage disparity also working against them.
However, there are several ways for women to boost their savings, super specialists say.
StatePlus head of advice Suzanne Doyle said older women faced financial vulnerability because they generally lived longer than men and had smaller super balances.
Australian Bureau of Statistics data shows the average super balance for women aged 55 to 64 is $180,000, but for men it is $322,000.
Ms Doyle said setting up salary sacrifice with an employer was the best way to save more in super.
“If they start earlier, compound interest makes a big difference,” she said. “Don’t try and leave it until a couple of years out.”
Suzanne Doyle, head of advice at StatePlus, says new rule changes will help women save.Source:Supplied
Upcoming changes to super rules will also help women. From July 2018 people will be able to make catch-up tax-deductible contributions to super. Instead of a $25,000 cap on these contributions every year, people will be able to roll over their unused cap for five years.
“It used to be use it or lose it, but now there’s an opportunity,” Ms Doyle said.
She said owning a home was important and should be part of women’s planning where possible. “People who have done well going into retirement are usually homeowners and have good super balances.”
Don’t forget the age pension, which remains the main source of income for almost three quarters of retirees, or advice from a financial planner.
“It doesn’t have to be a big commitment to having a financial planner,” Ms Doyle said. “They can help you just once — you don’t have to keep coming back and paying them money. They are there to help for situations like this.”
The Australian Securities and Investments Commission’s moneysmart.gov.au website this month released an infographic outlining women’s money challenges and how they can get to know their super better.
It said women could consolidate their funds, monitor their super more closely, and pay in extra — including after-tax contributions to increase their super balance faster.
“Depending on your annual income, you may also be eligible for a government co-contribution to your fund. It’s an easy way to give your super a valuable boost. Ask your partner or spouse to make contributions on your behalf. He or she may be able to claim a tax offset on the contributions made to your fund.”
Source: News Corp Australia Network
