Women still have much lower balances in their super than men, indicating Australia still has a lot of work to do on equality.
The current median value of superannuation held by women is a measly $35,000, compared to $62,900 for men, according to a new survey by Roy Morgan.
The good news is that the gap is closing compared to where it was a decade ago, rising from 44% to 56%. Awareness of the issue, the gradual impact of compulsory super, higher education levels for women, increasing work-force participation and a trend towards self-managed super are the major factors contributing to the gap closing somewhat.
But it clearly indicates that there are fundamental problems in our super system and work needs to be done to make it fairer. That is particularly important given women tend to live longer than men overall.
According to the Australian Government Institute of Health and Welfare, a male born in 2013 can expect to live to 80.1 years on average, while a female will live to 84.3 years.
The chart below shows that the problem exists for women of all ages but widens over time (thanks to compounding).
Incidentally, Roy Morgan's survey also showed that half of all men in the pre-retirement age bracket (50-64) have super balances less than $140,000 – they don't have enough for retirement either.
So what do we need to do?
- More work on equal pay for women. It's apparent from the differences at early ages that women aren't being paid the same as men for doing the same job.
- More incentives for women to contribute extra to super. Not only because they have less by the time they retire, but also because they'll live longer than men.
- Better financial education targeted at women. Anecdotal evidence suggests men take charge of the finances (including super) in relationships whereas it needs to be a shared responsibility.
- Ongoing encouragement for women to take control of their own super. Roy Morgan's survey showed that those in self-managed super funds were much more satisfied with the financial performance than those in industry and retail funds. One of the keys to that is ALL trustees of an SMSF need to play an active part in managing the fund.
Foolish takeaway
If you've read this far, think about what you can do to ensure Australia's women enter retirement on a more equal footing than they do now. Personally, I'll be encouraging my partner to contribute extra to super to build up her balance as a first step.
