Better Super Outcomes for Women
Better Super Outcomes for Women
Is the Government creating better Super outcomes for women? What does this news mean for equality in Super savings? And how women can take charge of their savings today.
As we all know, there is a gender pay gap close to 18% between men and women. Men are reaching retirement with about twice as much Super savings compared to women. This difference has prompted the Government to set up an inquiry into the financial security of women.
Meaghan Noble, Commonwealth Bank’s Executive Manager Women and Advice, explains … “Attention to this problem is obviously broader than just superannuation, but it includes ensuring superannuation rules allow all Australians equal opportunity to save.”
One of the proposed changes includes greater flexibility around contributions for people with interrupted work patterns. “This means when people are in a position to play catch up, they’re less likely to bump up against limitations,” says Noble.
“The reason the proposed changes could be great news for women is that, despite the evolving nature of family roles, women remain more likely to take themselves out of paid employment to care for children, and other family members.” Noble adds that regardless of the proposed changes, there is already a range of ways for women to take more control of their super.
FOUR Ways Women Can Take Charge of Their Super:
1.The first step to taking control:
“The first step is simply about taking ownership and valuing your financial well-being. If you’re in a relationship, it makes complete sense to work towards your retirement goals as a team, but that is quite different to relinquishing your involvement. Don’t underestimate your own capabilities.” Noble suggests using a Super Calculator to help see where you stand today.
2.Check your statements
Take a closer look at your Super statements, and don’t be afraid to ask questions if there are things you don’t understand. If you’re not sure where all of your Super is, contact the ATO for more advice.
3. Avoid unnecessary fees
Consider consolidating multiple funds into one in order to reduce unnecessary fees. This can also help you get a clearer picture of how your super is invested and performing.
4.Consider adding to Super
“Super is generally taxed concessionally, making it a great investment,” says Noble. But because there are a number of ways to top up, she recommends knowing the options available to you and seeking advice to ensure these and any other financial obligations you have are best balanced to you and your household.
Salary sacrifice is adding your own before – tax money to super via your employer. Together with your employer’s contributions, they’re known as concessional contributions; the sum of these can currently be up to $25,000 to take advantage of super’s concessional tax rate of 15%.
Personal contributions are those you add with your after-tax money for which you don’t claim a tax deduction. Provided this is only up to $100,000 per annum (or $300,000 over three years if under age 65), these contributions are tax-free.
“These may be two areas that become even more attractive if proposed changes go ahead,” adds Noble. “There are a few other options also.”
Spouse contributions are where one spouse contributes after-tax money into the super of a non-working or low-income earning spouse, and receives a tax rebate. Splitting contributions refers to concessional contributions that can be re-directed to a spouse’s account in subsequent financial years.
“Regardless of how far you are through your working life, it’s never too early or late to put your retirement savings on a better course. Help and advice is all around.”
Source: Colonial First State Investments Limited
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