International Women’s Day

A good time to think about financial security

International Women’s Day is a global day to celebrate the social, economic, cultural and political achievements of women.

It’s also an opportune time to raise awareness of the pressing issues still impacting gender equality. One of these is the financial security of women – particularly when it comes to their superannuation balances.

Research commissioned by Rest in 2017 revealed the overwhelming majority of women do not make a financial plan or seek financial advice ahead of planned career breaks, potentially causing a $159,5901 hit to their retirement savings.

The research examined the financial impacts of career breaks on working Australians. It found 53 per cent of the respondents admitted they didn’t consider the long-term financial impacts of their career break.

It also revealed that just six per cent of women participating in the survey sought professional financial advice before taking their career break, and only 16 per cent made a superannuation contribution during their break. By comparison, 15 per cent of the men surveyed said they sought professional advice, and 28 per cent continued to make super contributions.

Due to this, and lower average earnings, women who have taken a career break are predicted to retire with an average superannuation balance of $283,1412 less than their male counterparts.
The research also found that women take 4.2 career breaks on average, lasting for an average of 17.6 months.

Women take their career break at an average of 33 years old, with maternity leave (50 per cent) the primary reason, followed by leave to care for children (49 per cent), and health reasons (45 per cent).

Their return-to-work salary is on average 11 per cent less than their pre-break salary.
It’s important that all Australians, particularly women, consider the financial implications to their retirement savings of a career break.

With most career breaks arising by choice, there is opportunity to consult a financial adviser about keeping up superannuation contributions and building a financial plan.
 
About the research
 
The survey was conducted by Lonergan Research between 4 October and 9 October 2017 of 1,030 Australians (both males and females) who have ever taken a career break of at least three months.
 


1 Lonergan Research economically modelled the amount of lost superannuation of working women at the retirement age of 67 between those taking no career breaks and those taking career breaks, of which they took 4.2 career breaks on average. The calculations are based on self-reported cost per career break; 9.5 per cent compulsory contribution to superannuation is assumed for the entire working life; 15 per cent contribution tax; and superannuation account balance is compounded annually at 4.95 per cent (based on average 10-year rate of return after tax and fees from APRA Annual Fund-level Superannuation Statistics 2016). No voluntary contributions are modelled. The results are on 2017 Australian dollars with no adjustment for inflation.

2 This is the economically modelled average difference of superannuation balance by the retirement age of 67 between men and women if they took one career break.
 

This website is provided by Retail Employees Superannuation Pty Limited ABN 39 001 987 739, AFSL 24 0003 (Rest), trustee of Retail Employees Superannuation Trust ABN 62 653 671 394 (Fund), of which Rest Super, Rest Corporate, Rest Pension and Acumen are part. It contains general advice that has been prepared without taking account of your objectives, financial situation or needs. Before acting on the information or deciding whether to acquire or hold a product, consider its appropriateness and the relevant Product Disclosure Statement (PDS), which is available on this website. The cost of providing financial services is included in the fees in the Fund as disclosed in the relevant PDS. Rest and the Fund do not charge any additional fees or obtain any commissions for the advice provided. Rest’s employees are paid a salary and do not receive any commissions. They may receive a performance related bonus that takes into account the financial services provided. Super Investment Management Pty Limited (ABN 86 079 706 657, AFSL 240004), a wholly owned subsidiary company of Rest, manages some of the fund’s investments. Apart from this, Rest does not have any relationships or associations with any related body corporate or product issuer that might reasonably be expected to be capable of influencing Rest in providing financial services.

Rest personal advice is provided by Rest Advisers as authorised representatives of Link Advice Pty Ltd ABN 36 105 811 836 AFSL 258145

Awards and ratings are only one factor to consider when deciding how to invest your super. Further information regarding these awards can be found at rest.com.au/about-rest/awards. Past performance is not an indicator of future performance. SuperRatings Pty Limited does not issue, sell, guarantee or underwrite this product. Go to superratings.com.au for details of its ratings criteria. For further information about the methodology used by Chant West, see www.chantwest.com.au