Women and super: how to overcome the gender gap

7 March 2023

Women tend to retire with far less super than men do. The gender gap in superannuation is 23.4% according to the Association of Superannuation Funds of Australia (ASFA), based on median figures of account balances¹.

Considering that women tend to live longer than men and they retire earlier than men, the gender gap for super is putting many women at a severe disadvantage.

So why do so many women have lower super balances than men at retirement? Throughout their working lives, many women:

• tend to earn less than men
• are more likely to be in part-time employment
• can spend more time out of the workforce raising children
• often act as carers for elderly parents.

Struggling to retire comfortably

Because super is directly linked to participation in the workforce, many women are constantly at a disadvantage.

According to the ASFA Retirement Standard, a single person aged 67 would need a super balance of $545,000 to retire comfortably.²

For many women, achieving this amount of super is a real challenge. ASFA research shows that for women aged 65-69, the average super balance was $370,042, and the median super balance was $180,718 (June 2019).¹

(Note: A median is the mid-point in a data set and can sometimes be more descriptive of a trend than an average. This is because extreme values at the top or bottom of a data set can skew an average.)

The large gap between ASFA’s suggested amount and actual savings means that women are more likely to rely on the government’s Age Pension, which is only designed to cover the basic essentials.

How to close the super gender gap

There are a few steps that you can take to overcome the challenges facing so many women with their super and achieve a more comfortable retirement lifestyle.

Everyone is different, so not all these ideas will appeal to you. You should consider what’s best for your personal circumstances.

1. Get to know your super

One of the best things to start doing is to get a better understanding of your super account. Find out what your account balance is today. Then look at what contributions having been going in, your investment returns and fees. Ask yourself, how healthy is your super looking?

The quickest and easiest way to view your account is by logging into Member Online.

If you would prefer to talk to us, you can contact us on 1800 444 396.

2. Think about how much you might need in retirement

There are several factors to consider when assessing how much money you need to retire.

Think about how you want to live your life in retirement. When considering levels of comfort in retirement, ASFA suggests listing your expenses under four main groups: daily essentials, staying fit and healthy, staying socially engaged, and connecting with family.

The ASFA Retirement Standard provides some useful examples of these expenses.provides some useful examples of these expenses.

You could also think about any potential income sources you may have to support yourself. This could include things such as your super, investments, additional savings, an expected inheritance or government entitlements.

3. Consolidate your super

If you have more than one super account, you could be paying more fees than you need to. You could consider consolidating them into one account.

According to the Government’s Moneysmart website, the benefits of consolidating your accounts include saving on fees, reducing paperwork and making it easier to keep track of your balance.

Consider what is best for your situation. Compare your super funds, choose the one you think will give you the best long-term outcome. Before consolidating, you should check that this could result in changes to your employer contributions, any fee or tax implications, or loss of insurance cover.

Find out more: Consolidate your super

4. Explore ways to grow your super

If you have any spare money, even a small contribution into your super today can make a big difference to your future retirement. Your money can keep growing over the long-term thanks to the power of compound interest.

You can see how your savings could grow over time by using the compound interest calculator on the Moneysmart website.

Here are some ways of making additional contributions into super:

• Salary sacrificing

Salary sacrificing is when you make an additional contribution to your super from your before-tax pay.

If you are working, salary sacrifice can be a tax-effective way to grow your super. A salary sacrifice contribution is taxed at 15%, which for anyone earning more than $45,000 per year (2022/23) is a lower rate than the marginal tax rate.

There are three potential benefits: pay less tax, reduce your taxable income and grow your super.

Find out more: Salary sacrifice info sheet

• Partner contributions

If you are married or in a de-facto relationship, your partner can help you grow your super. This can be helpful if you have had time out of the workforce. Helping each other’s super to grow means you can both enjoy a comfortable retirement together.

Find out more: Super for your partner

• Government support for low and middle incomes

The Australian Government can help low and middle-income earners save for retirement in two ways:

• Super co-contributions – if you have a total annual income of less than $57,016 (2022/23), the Australian Government will contribute up to 50 cents for every $1 you put into your super as an after-tax contribution, to a maximum of $500 in a financial year.
• Low income superannuation tax offset (LISTO) – if you earn $37,000 or less each financial year, you could receive a refund of the 15% tax you pay on concessional contributions when they reach your account, up to a maximum of $500 each financial year.

Eligibility requirements apply for both schemes.

Find out more: Super support for low and middle-income earners

5. Get the most out of your annual contribution cap

There may be times in your life when you are able to make either ongoing or one-off substantial extra contributions to your super, such as through career progression or receiving an inheritance. However, while there are generous tax-incentives for super contributions, there are also annual contribution caps you need to be aware of or each financial year the contributions caps are (as at 2022/23):

• For concessional contributions (before-tax) such as employer contributions and salary sacrificing, the annual cap is $27,500.
• For non-concessional contributions (after-tax), the annual cap is $110,000. If you are taking time off work or have a fluctuating income, there are a couple of options that can help you overcome the constraints of an annual cap:
• Carry-forward rules – carrying forward unused concessional (before-tax) contributions cap amounts, going back to 2018/19.
• Bring-forward arrangement – making up to three years’ worth of non-concessional (after-tax) contributions in a single year

Find out more about both options in our contribution caps info sheet.

6. Review your investment options

You always have the choice of how you want your super invested. It’s a good idea to review your investment option to make sure it suits your financial situation and goals.

Our default option is MySuper, but we have a wide range of options to cater for everyone’s needs. You can switch to another option at any time.

When considering an investment option, three of the most important factors to consider are:

• Your age now, and when you plan to retire – this is your investment timeframe.
• Your financial goals – the returns needed to achieve a comfortable retirement.
• Your tolerance for risk – the level of investment risk that you are comfortable with at this stage in your life.

To help you choose the best option for you, details of all our investment are options can be found in the Investment Choice Guide for your account.

We’re here to help

If you would like to find out more about growing your super, including what investment option might be right for you, our team of superannuation specialists and financial advisers are here to help you.

We offer our members Super Health Check appointments over the phone or video call, at no additional cost. We look at your superannuation account, discuss different ways to grow it, and check that you are on track for a comfortable retirement.

Our financial advice service ³ can help you plan for a better financial future. Members can receive limited advice on topics related to superannuation, at no additional cost. More comprehensive financial advice is also available, and fees will vary depending on the type and complexity of advice.

Call us on 1800 444 396 to discuss the type of appointment that would suit you best.