Is your super balance falling behind?

Australian women are still playing catch up with their super. 

It’s no secret that when women retire, their super balance is typically lower than men's, and many haven’t saved enough to enjoy a comfortable retirement. 

Research by the Association of Superannuation Funds1 shows the average retirement balance for men aged 55 to 64 in Australia is $332,700, compared to just $245,100 for women – that’s 27% less.   

Why is there a super gap?

While many factors contribute to the gap between men’s and women’s super balances, including relationship breakdowns and time out of the workforce to care for children or aging parents, one of the biggest contributors is the lower average earnings of women. 

Despite advancements in women’s education and workforce participation, as well as new anti-discrimination legislation, the national gender pay gap in Australia has consistently hovered between 14% and 19% over the last 20 years2.

The good news is the latest data from the Workplace Gender Equality Agency shows the full-time remuneration gender pay gap is now 13.4%2 (as at February 2021), so it’s moving in the right direction. It seems the introduction of new workplace policies have allowed women to progress into management and leadership roles faster. And flexible working and paid parental leave schemes are proving essential to retaining female staff members during and after pregnancy. 

Take small steps to a better retirement

Earnings have a direct impact on retirement savings. The less money you earn, the less superannuation you’ll receive because your employer’s Superannuation Guarantee contributions are determined based on a percentage of your income. This is further compounded by any period where you don’t make superannuation contributions, such as when taking time out to care for children.

But don’t rely on your employer to fix the problem and close the gap for you. While there are signs of action and positive change to address the gender pay gap, workplace transformation takes time and you need your super to be working hard for you now. 

So, it’s time to take action. Even small changes can potentially make a big difference to your super balance in the long term.

Here are six simple steps you could take to help boost your retirement savings straight away.

1. Find and consolidate

If you’ve worked for a few different companies you might have several super funds or you may even have some lost super you’ve forgotten about.

Check to see if you have any lost super on the myGov website or ask your super fund if they can help. 

2. Know your worth

See how your salary compares with those doing a similar role, and more specifically how you compare with males in a similar role and speak to your employer about regular pay reviews.

3. Set up salary sacrifice

You could also speak to your employer about setting up salary sacrifice, where you contribute an additional amount into your super from your pre-tax income each pay cycle. Not only can this boost your retirement savings but you can also potentially enjoy tax benefits.

4. Make contributions

Consider making additional personal contributions to your super. Small regular amounts over a longer period may be easier to commit to and may help narrow any gap caused by taking time out of the workforce. You could even start this before you have children, so you don’t miss out.

Also, look into Government co-contributions if you’re a low-income earner. Subject to eligibility, the Government will make a maximum co-contribution of up to $500 if you earn less than $39,837 in the 2020/21 financial year and you’ve made a contribution of at least $1,000. 

And if you have a spouse, they can split some of their concessional contributions each year with you to help boost your super balance.

5. Give your super a check-up

Assess whether your current super fund is appropriate for your needs, including the level of insurance cover, fee structure and investment options. If you have a long time until retirement, you may benefit from an investment strategy that includes exposure to growth assets like shares and property, as you have time to ride out the market ups and downs.

6. Remember the long term

COVID-19 tempted many to access up to $20,000 in their super early to provide immediate financial support after a sustained period of unemployment or reduced income. But there can be considerable long-term costs of making early withdrawals from super.

Analysis by Canstar Research3 shows a 25-year-old who had $20,000 in their super is anticipated to lose up to $102,824 by retirement age if they withdrew the full amount.

Taking the time to give your retirement savings a little help today could transform your super balance in the future.

For more tips about taking control of your super and finances, watch our Women Living Well webinar, and hear our experts share their best ideas.


1 https://www.superannuation.asn.au/ArticleDocuments/269/SuperStats-Mar2021.pdf.aspx?Embed=Y
2 https://​www.wgea.gov.au/​data/​fact-sheets/​australias-gender-pay-gap-statistics
3 https://www.canstar.com.au/superannuation/risks-access-super-early/

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This information is current as at 30 September 2020. 

This information has been prepared without taking account of your personal objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

This article may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, no company in the Westpac Group accepts any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material. 

The tax position described is a general statement and is for guidance only. It has not been prepared by a registered tax agent. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice. 

Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or visit the ATO website.