On 8 March it’s International Women’s Day – a day for celebrating the social, economic, cultural and political achievements of women, and the progress we’ve made with regard to equality.
But it’s also a day for looking at the disparities that still exist between men and women and to consider how we can continue to lessen the gender gap.
Where is there a gender gap worldwide?
The World Economic Forum’s latest Global Gender Gap report reveals:
- It’s been an ambiguous year for progress, as out of the 142 countries covered this year and last year, 68 countries have increased their overall gender gap score compared to last year, while 74 have seen it decrease.
- The most challenging gender gaps remain in the economic sphere and in health. At the current rate of change, and given the widening economic gender gap since last year, it will not be closed for another 170 years.
How does Australia compare?
Australia doesn’t fare as well as you might think. While New Zealand is ranked 9th of the 144 countries assessed, Australia is number 46.1
We’ve achieved equality in educational attainment, and the gaps in our health and survival and political empowerment have improved over the past ten years,2 but our equality score in the area of economic participation and opportunity has fallen from where it was 10 years ago.3
What do the statistics show us?
Men working full-time in Australia earn around $17,000 more than women each year in their base salary, but this extends to $27,000 when assessing total remuneration, including super, overtime, bonus payments and other discretionary pay.4
The result of these lower earnings – along with women taking time out of the workforce to raise children or to look after ageing parents – is that at retirement age, women have less super on average than men: $180,013 compared with $321,993.5
In fact, across all age groups, Australian men have more super, and a quarter of women have no super savings at all.6
September 2016 figures show individuals who are looking to retire today need an annual budget of $43,372 to fund a comfortable lifestyle. This assumes they own their home outright and are in relatively good health.7
When considered together, these statistics show that many women mightn’t have the money they need to live the kind of future lifestyle they want.
Steps to a better future
While you mightn’t be able to talk your employer into a huge pay rise, there are some steps you can take now to improve your future financial security.
What’s more the next few months present a unique window of opportunity, where you can give your super more of a boost than what you’ll be able to after government legislation changes, as of 1 July.
The before-tax super contribution cap is changing from 1 July, decreasing from $30,000 (for those aged under 49 as at 30 June 2016) or $35,000 (if you're 49 or older as at 30 June 2016) to $25,000 per year for everyone, irrespective of age.
So there is an opportunity now if you’re not going to reach your cap, to get your employer to contribute extra money into your super from your before-tax salary before the cap is reduced at the end of financial year. The money comes directly out of your salary before your pay hits your bank account, so you’re less likely to notice its absence.
If you want to add more to your super on an ongoing basis, find out how even a small amount each week can make a big difference to your retirement. But just be mindful of the reduced $25,000 cap you’ll have after the new financial year comes around.
While many of you probably don’t have tens of thousands of dollars lying around, if you’ve just sold a property, inherited some money, taken a redundancy or received a work bonus, you might have a lump sum you’re looking to invest. Boosting your super can be a tax-effective option, and one that could pay dividends into the future.
- Currently, you can contribute up to $180,000 in after-tax contributions to your super in a financial year. However, from 1 July, that will almost halve, reducing to $100,000 per financial year. By acting now, you can make an after-tax contribution for the financial year of $80,000 more than what you’ll be able to as of 1 July.
- If you’re under 65, you can also bring forward three years’ worth of after-tax super contributions. By acting now, you can make an after-tax contribution of up to $540,000, but from 1 July that will reduce to $300,000.
- If you have total superannuation assets of more than $1.6 million on 30 June 2017, you won’t be able to make an after-tax contribution next financial year at all. So this financial year may be your last opportunity to make any after-tax contributions.
Government super co-contribution
- If you earn less than $51,021 for the current financial year, and make an after-tax super contribution, you may be eligible for the Government to kick in up to $500 as a bonus, known as the super co-contribution.
Any amount put into your super now gets you one step closer to a comfortable retirement - something all Australian women deserve.
- Check your super balance: If you’re an AMP super customer, you can become familiar with your super balance by logging into My AMP.
- Do a lost super search in 3 easy steps to reclaim super from previous jobs you may have forgotten about.
- Consider consolidating: By consolidating your super funds you make managing your super more easy and reduce the amount you pay in fees.
- Forecast your retirement savings with our super simulator.
- Use our salary sacrifice calculator to explore how making additional contributions, both before and after tax, could boost your super savings for retirement.
If you’d like help with closing your super gap, speak to your financial adviser or find an adviser in your local area. Alternatively, you can call us on 131 267 from 8:30am to 7pm (AEST) Monday to Friday.
The clock is ticking on super changes
Changes to the superannuation rules will come into effect on 1 July 2017. The good news is that you could still take advantage of opportunities before the financial year ends.
Casual workers can face an uphill battle saving for retirement, which is why a proactive approach is essential.