4 Easy Steps To Close The Super Gap
Some really shocking facts:
- the average super account balance for women when they retire is $90,000 less than the average for men
- 90% of women will retire with inadequate savings to fund a ‘comfortable’ lifestyle.
This is why I provide financial advice specifically for women. We work hard and we deserve better!
One of the major contributors to this issue is ‘super baby debt’. Taking off work to have a family creates a huge dent in contributions. When not at work, employer contributions typically stop and with part-time work, they are a fraction of their previous level.
Other contributing factors to women not building a reasonable amount of retirement savings include: lack of pay parity, running a single-parent household after divorce and inability to be the primary care-giver and work full-time.
Here’s 4 easy steps you can apply to decrease the super gap:
- Get your super reviewed
Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns. For example, total annual fees of 2% of your fund balance rather than 1% can reduce your final return by up to 20% over a 30-year period.
The very reason that such large differences in fees and performance exist is that so many of us are too lazy to get our super reviewed.
Of all the strategies mentioned below, reviewing your super is the one that takes the least effort and will have the largest impact.
All it takes is a simple call to someone like myself to get this sorted out – easy as.
- Get your hub to contribute
If you have a taxable income of less than $13,800 for the financial year, then your spouse can make an after-tax contribution on your behalf and claim a maximum tax offset of up to $540.*
- Get the government to contribute
Another option to help you ‘catch-up’ on your super savings is to take advantage of the Government co-contribution scheme. If you are working (either full or part time) and earn less than $50,454 for the 2015-2016 tax year, you may be eligible for the Government co-contribution scheme. If you make an after-tax contribution to your super fund, the government will contribute an equal amount – up to $500. *
- Increase your own contributions
If you are in positive territory – you are spending less than you earn – salary sacrificing is an excellent way to
- save on your tax and
- spearhead your super.
Be aware that the maximum amount of pre-tax contributions for the 2015-2016 financial year is $30,000.
Taking your current superannuation savings plan into account – do you feel you will have adequate superannuation to fund your lifestyle in retirement?
*while the above strategies are pretty much ‘as they say on the box’ certain eligibility and other criteria do apply
Disclaimer
Marisa Hoffenberg and Growth Point Financial Pty, Ltd. Are Authorised Representatives of Synchron, ABN 33 007 207 650, 243313. This is of a general nature only and is not intended as personal advice. It does not take into account your particular investment objectives, financial situation and needs. Before making a financial decision you should assess whether the advice is appropriate for your individual investment objectives, financial situation and particular needs. We recommend that you consult a professional financial adviser who will assist you. The information and certain references, where indicated, are taken from sources believed to be accurate and correct. To the extent permitted by the law, Synchron, its representatives, officers and employees accept no liability for any person that relies on the information contained herein.