Imagine you’ve got to the end of a long working life – populated by career rollercoasters and perhaps a widening family – but for every dollar your husband has to spend in retirement, you have 66 cents.

This is the reality for many Australian women, with the latest figures showing men can expect to retire with over a third more super than women.

So why does this happen and what can be done about it?

Figures from the March 2019 Women’s Index report from Financy show that, on average, Australian women have 34 per cent less super than men as they approach retirement.

Although the super gap has been trending downward in recent years, it still shows how much less money women have to last them throughout retirement. Women can also expect to live longer than men, so there’s an even higher likelihood that Australian women are having to do more with less in their senior years.

In their recent report, The Future Face of Poverty is Female, Monash University together with Australian Super, highlight concerns about the financial position of women in retirement and share the stories of women in later life, reflecting on their experiences as women, mothers and employees.

The report also includes statistical data about women’s workforce participation, earnings, and the impact of having children on both. Based on the data and stories collected, the report concludes that:

Women who take parental leave and work part time will be subject to a superannuation double penalty effect: (i) lower or no superannuation contributions are made as a direct result of reduced paid work; (ii) the detrimental effect of part-time work and career breaks on opportunities for promotion and moving jobs (and associated salary increases).

A little goes a long way

As a Private Client Adviser about to have my first child, I have made an allowance in my household budget for super.

With so many competing priorities at a time like this, it’s hard to make sure retirement savings stay on the list. But allocating something is important. I’ve looked at insurance premiums I’ll be paying through my super to make sure I keep contributing at least enough to keep my account balance from going backwards.

As someone who advises people of all ages on saving for retirement, I’m very aware of how important it is to keep your super balance growing, no matter how slowly.

Even the smallest contributions can have a very significant impact, particularly when you’re still decades away from retirement.

If you’re 30 now, putting away $50 per week for 35 years will give you an additional $246,000 for retirement (assuming a 5% Return on Revenue).

Think of the difference a sum like that can make to your lifestyle in retirement.

When two incomes become one, it can be challenging for a family to find that extra $50 for super savings.

This is where keeping on top of your cash flow is key.

If you’re earning a lower income after returning to work part-time – or no income at all while you’re not working – you may benefit from a helping hand with super savings from the government.

There are tax offsets and co-contributions available to make sure these small contributions boost your balance even more. And your spouse or partner may also benefit from tax offsets for making contributions into your super fund.

Speak up for sharing

If you can return to paid work sooner rather than later after becoming a parent, you can continue to get the benefit of Super Guarantee (SG) payments.

Not only can this make a difference to your super savings now, it can also be important for your future earning potential.

The super gap primarily comes about because women aren’t earning as much.

So, don’t presume you’ll be the one taking a long career break. It’s worth discussing with your partner or other support people how you can share the opportunity to be a parent and have a career.

Another sharing conversation that can be critical for women is a discussion about super assets in a divorce settlement.

If you’re splitting up, it’s very important to seek legal advice and representation on what you’re entitled to from the shared assets of the marriage.

Another critical conversation for women is a discussion about super assets in a divorce settlement

Never too late to save

I have often advised female clients who find themselves with low super savings in the lead up to retirement, for all sorts of reasons.

I generally recommend these clients make extra contributions, however modest.

Contributing extra into super for just five or ten years before retirement can still make a big difference. And if you’re already retired, there’s real benefit in getting a handle on your cash flow to make your savings last longer.

Whether you’re getting to grips with your household budget in retirement, negotiating your divorce settlement or your return to work, Alison recommends finding out as much as you can about the financial impact of different options.

Make the time to get informed and educated. Figure out your budget, explore some different scenarios and use all of this to decide what will provide you with the best financial outcome while balancing the family and emotional factors.

Find out more about doing this through a salary sacrifice arrangement that could help you save more for retirement and pay less tax.