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One of the greatest financial challenges women still face today is that they are earning and retiring with less superannuation than men. According to the 2017 Hilda survey, the average superannuation balance for women at retirement was $230,907, with men retiring with twice this amount. The system benefits the higher earning 'working fathers' and the traditional social structure of the 80's and 90's, however society has since changed and there are more single mothers supporting their family solo. Fortunately, there are a number of ways women can grow their super and also access it early if they need to.
Growing Your Super
Personal Contributions
Your employer should be contributing super to your fund at a rate of 9.5%, but you are also able to make your own contributions, called Personal Contributions, directly to your fund. If you earn less than $36,813 per annum and make a voluntary Personal Contribution of up to $1,000 in that same year, the government will give you a 'Co-contribution' of up to $500 towards your superannuation. Over 35 years with an effective return rate of 5% that's an extra $135,480 in your super fund, which would be a very nice bonus when you retire!
Spouse Contributions
Your spouse can also contribute to your personal fund, provided you earn below the threshold of $40,000. If they contribute at least $3,000 to your super fund, they will also be able to access a tax offset of up to $540. A great outcome for you, and your partner.
Salary Sacrificing Superannuation
Another way of boosting your super fund is by salary sacrificing into your super. You and your employer can agree to contribute a portion of your pre-tax salary to your fund, meaning your taxable income decreases. Your fund will still tax you on this contribution, but at a lower rate of 15%, considerably less than the standard individual tax rates you would normally be subject to.
Accessing Your Super
It can be frustrating to know that you have a large amount of money inaccessible until retirement age. However, sometimes life throws us a curveball and thankfully we are able to access our super under limited circumstances. Here are some of the ways you may be able to access your superannuation:
Medical Conditions
If you or one of your dependents become very ill, experience permanent or temporary incapacity, or you need to modify your house or car to accommodate this, you may be able to access some of your super early.
Financial Hardship
Similarly, if you find yourself in severe financial hardship and are receiving eligible government support payments, you could access up to $10,000 to help you meet reasonable and immediate family living expenses. This also allows you to keep up repayments on your mortgage.
Low Super Balance
If you have a super fund which contains less than $200, you can access this by contacting your super fund, who will then release this to you tax free.
Domestic Violence
Currently, a campaign headed by super fund HESTA is setting out to change legislation through the Federal Government. If successful, women experiencing domestic violence and wanting to leave abusive partners, will be able to access $10,000 of their own super, to assist them with accommodation and initial costs associated with rebuilding their lives.
With a large focus on equality, empowerment, and stability for women, it is essential that we are on top of our finances and superannuation to ensure we create a bright and seamless financial future for retirement.
For more information regarding superannuation please visit the Australian Tax Office website. If you or anyone you know is experiencing Domestic Violence, please go to White Ribbon Australia for further information and advice.
