Do women have different financial planning needs?
A superannuation study undertaken by StatePlus found that 64% of women will struggle to achieve a comfortable lifestyle following retirement, which brings the question, do women have different financial planning needs?
According to the ABS, the average superannuation balance for women aged between 55 and 64 is $180,000, compared to the $322,000 for men in the same age bracket. A study conducted by the Workplace Gender Equality Agency shows that on average, women retire with $104,734 in superannuation, 46.6% lower than men. This superannuation gap isn’t just a problem older women face, with young women aged between 20 and 25 having 20.4% less in super than men in the same age group.
This is a concern for many women when considering their future financial needs given that they have a higher life expectancy than men, and are becoming increasingly more likely to live into their hundreds. A combination of these, taking time off of work to care for children, and the wage gap in Australia (18.8%) create a sense of vulnerability for older Australian women.
So, how can women better plan to meet their future financial needs? From July 2018, people will be able to catch up on deductible contributions to their superannuation funds. This means that instead of capping contributions at $25,000 annually, unused caps will be able to be rolled over for five years, creating an opportunity for individuals to bulk up their super. Other suggestions include investing in property, getting financial planning advice, and consolidating all super funds which an individual may have.
It is becoming increasingly important for women to take control of their financial futures. At any stage, there will be opportunities to save, invest and plan to ensure financial security in retirement.
ASIC have released a helpful infographic which looks at various money challenges women face, which can be accessed here.
This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.