The superannuation savings scheme has often favoured men, rather than women. This isn’t a sexist remark, but purely showing the way that men and women work their lives so differently and of course, there are always exceptions to the rule. Many women spend time out of the full-time workforce during the latter stages of pregnancy and potentially for some years after their children are born. In general, children are raised more by the mother who is also the person who looks after illnesses and family emergencies.
When you’re talking with your mortgage broker in Kwinana, it helps if you can look at your entire financial situation taking you well on into retirement so that you can plan properly for your property purchases. Many women’s superannuation balances are only just over 50% of those acquired by the men, meaning that women won’t be able to retire on a comfortable income yet when retiring at the age of 65 today; many women can expect to live into their 90s.
Potential Solutions to the Problem
There are many prospective ways to solve the imbalance of women’s superannuation savings over the long term. There are ideas that would allow employers to pay 15% contributions of superannuation for female employees, currently before the Human Rights Commission.
Superannuation is taxed in two areas; on earnings and on the contribution. If one of these taxes was dropped, the contributions would grow much quicker.
Employers can react differently to the way that they fail to pay superannuation when an employee is on maternity leave. By paying superannuation during that period of time, the savings pot will be growing much quicker.
Some people have the idea that the government should match women’s contributions dollar for dollar and also make them tax-free. This would encourage people to put money into their superannuation savings scheme while they’re working.
It has been suggested that when a relatively new mother is out of the workforce because they are raising their family, their husband or partner should be permitted tax-free contributions into the lady’s superannuation savings account.
Unfortunately, there is a lack of education in understanding the superannuation system that exists in Australia. The providers of financial services know all about this, but don’t have great plans to inform their customers further. It’s clear that where women understand the superannuation system well, they can make informed and confident decisions about their financial future.
If the education started earlier, during the last years of schooling, the basics of investments and financial advice would help young women in particular, understand what is in front of them.
The original purpose of the superannuation scheme was to create a large enough fund that people could live off during their retirement years. As this isn’t happening in the way that was originally planned, you can take control by meeting with your mortgage broker in Rockingham and consider alternative investments, perhaps in property, to meet your retirement needs.