Why we need to focus more on our retirement
Despite the advancement of women’s roles in the workplace over the last few decades, the fact still remains that women of retirement age are more likely to be living below the poverty line than men.
There are two clear means to address this. Of course, policy-makers have a role to play, however attention needs to be given to educating women to take steps to rectify this.
One would think that with increased female participation in the work force and closing the gender pay divide that this would not be an issue in the future, however it continues to plague us for the following reasons:
1. Timing:
Women are more likely to attend higher education and hence enter the paid workforce later;
2. Family Commitments:
Women are more likely to take time out to care for children, elderly parents or spouses. For these reasons they are more likely to work part time or retire earlier than planned;
3. Career progression:
Women continue to be overrepresented in roles that are lower paid and therefore have less opportunity to save from these incomes.
4. Longevity:
On average women live longer and hence need their savings to support themselves for a longer amount of time.
Like men, women cannot rely on their compulsory superannuation savings to provide them with a comparable retirement income stream to their pre-retirement salary. It is important for everyone to focus on topping up these contributions and giving greater thought to how much they will really need in retirement. Women in particular need to focus twice as much to make up for times when we are not in the paid workforce or receiving a full wage.
It is important to review your superannuation regularly. You should consider:
- Consolidating funds to reduce fees
- Checking that your investment selection matches your risk profile and stage in life. You may wish to reduce risk as you get closer to retirement.
- Incentives to top up your superannuation, such as the Government Co-contribution scheme
- The benefits of salary sacrifice
- Commencing contributions to your fund earlier than later.
When it comes to planning for retirement women have greater reason to be proactive than our male counterparts. We need to ensure financial security for our futures. Seeking advice earlier than later on how to achieve this is important.
If you need assistance with your superannuation planning, drop me an email sarah.parsons@williambuck.com or call on 08 8409 4333.
