If you’re like most Australians, you were probably pretty underwhelmed by last week’s Federal Budget announcement with the same promises of job creation and economic growth.
But there was one aspect of the budget that caught my attention personally – the Low Income Superannuation Tax Offset that will benefit over 3 million people by paying up to $500 a year directly into their super accounts. The real shock for me was two-thirds of these low income earners were women.
The gender superannuation gap
Yep unfortunately, the superannuation accounts of Australian women are looking a bit bare compared to that of Aussie men. In fact, according to the Association of Superannuation Funds of Australia, women are retiring with just $54,916, compared to men with $98,535 – that’s a difference of around $44k!
While $500 extra a year is a good start, filling the gender superannuation gap by relying on that alone would take 88 years. So how can Australian women take their super into their own hands and fill this divide?
Ladies, with a little online research, I’ve come up with the below tactics to plump up your super:
- Consolidate your superannuation accounts: One of the biggest things that eats away at your super balance is fees, and all the more so if you have multiple superannuation accounts. So take the time to roll over all your varying super accounts into the one low fee account.
- Hunt down your lost super: Perhaps you’ve had so many superannuation accounts over the years that you’ve forgotten about one account or two. Lucky for you, the Australian Taxation Office has a SuperSeeker tool that you can use to track down your lost super.
- Make extra contributions: Whenever you get a bonus at work or generous tax return, resist the urge to splurge, and instead pump that cash straight into your superannuation account. According to Money Smart, most Aussies can deposit up to $30,000 extra into their super each year and if you’re over 50 that jumps up to $35,000.
- Salary sacrifice: If you’re nearing retirement, consider increasing your employer’s contributions to your super from the required 9%. You’ll not only boost your nest egg but also reduce your taxable income, so it’s a win, win situation!
- Spouse contributions: If you’re a low income worker, did you know that your partner can also make contributions to your super? So while you’ll plump up your super, they’ll benefit from a tax offset of up to $540 per year.
- Get the best return on your coin: If some of your nest egg is in a savings account or term deposit, ensure you’re comparing the market on a regular basis for a high rate deal. For instance at the time of writing, QPCU is offering a high rate of 3.20% for a term deposit of 2 years, earning you an extra $1,320 on a $20,000 sum.