Australians now need a record amount of superannuation to afford a comfortable retirement, and one group is still lagging significantly behind. Women are approaching retirement with tens of thousands of dollars less in superannuation than men, but there are moves that can be made now to help close the gap.
By the age of 40 to 44, men have a median super balance of $108,344, compared to women with $79,445 – a gap of nearly $30,000. This gap peaks in the 55 to 59 age range, where men have $202,584 on average and women $140,662 – a difference of more than $60,000.
AustralianSuper deputy chief executive and chief member officer Rose Kerlin told Yahoo Finance while we’ve seen some improvements over time, the super gender gap is “still very real” and becomes the most obvious as women approached retirement.
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“A big part of the gap comes down to caregiving and disparities in pay. When women take time out of the workforce or move into part-time roles to care for children or family members, their super takes a hit, and that impact compounds year after year,” she said.
This gap is particularly worrying now that a single homeowner aged 67 needs a lump sum of $630,000, up from $595,000, to achieve a comfortable retirement. Couple homeowners need a balance of $730,000 in super, which is up from $690,000.
In contrast, the latest ATO data shows men at or approaching retirement at 60 to 64 have a median balance of $219,73, while women have $163,218.
The government has flagged reforms to help address the gap. Since July last year, superannuation has been paid on government parental leave payments.
From July next year, the Low Income Superannuation Tax Offset (LISTO) income threshold will increase from $37,000 to $45,000 to align with the top of the second income-tax bracket. The maximum LISTO payment will increase from $500 to $810.
While policy reform is important, Kerlin said there were also things women could do now to feel more on top of their super and more confident about where they’re headed.
“Small actions today can help build greater confidence and security for the years ahead,” she said.
One action could be making additional contributions, even small ones, whenever possible, as this could make a big difference over time.
AustralianSuper’s modelling found that someone who made after-tax contributions of $600 annually between the ages of 35 to 39 and met the eligibility criteria for the government’s co-contribution of $300 each year could retire with $9,000 more.