Christine Hornery

Some of the most disturbing statistics in the Association of Superannuation Funds of Australia (ASFA)’s March 2014 update on the level and distribution of retirement savings, according to financial planner Christine Hornery, director of FMS Group, are that more than a third of all women and around 60 per cent of those aged between 65 to 69 reported having no superannuation.

“What these statistics tell us is that one in three women in Australia does not have a single cent in super,” Ms Hornery said. “They have no money stashed away in superannuation for retirement whatsoever.”

Ms Hornery said women need to take extra care of their financial future – and not just because typically they are likely to live longer, live longer in retirement and earn less than men but because moving forward, fewer people are likely to be able to access the age pension entitlement.  “I believe there are women retiring today who are using Centrelink to subsidise their retirement and that just may not possible for as many people in the future,” she said.

Women need to understand that the preservation age (the age at which people can withdraw money from their superannuation funds), the retirement age and the ability to access retirement benefits is likely to lift so they need to act early if they want to have sufficient funds to do what they want to do in retirement.

“The other disturbing thing is that many women are not engaged when it comes to their superannuation and, I believe, are only becoming less engaged,” she said.

The Suncorp-ASFA 2012 Super Attitudes Survey (the Survey) revealed only 19 per cent of women say they are actively involved with their superannuation. “The main reason given by women for their lack of engagement was that they didn’t know how to get more involved,” Ms Hornery said.

Although the numbers are not broken down by gender, the Survey also said one in four Australians don’t know their current balance, one in 10 don’t know who their super provider is and one in four either don’t know what fund option they are in or that they could choose. “Finding answers to these four questions is a good place to begin for women who don’t know where to start,” Ms Hornery said.

Time spent on managing other day-to-day finances was also a common reason for people not to get involved with their super, according to the Survey, with 30 per cent of Australians citing this reason.

“What this tells us is that people think there are more pressing things in their current lifestyle so they aren’t thinking about the future,” Ms Hornery said. “My suggestion is to not just think about today – start thinking about what your future is going to look like. And then get financial advice. Talk to a professional and get some advice and strategy so that you can accumulate more funds towards retirement savings. A product alone is simply not going to give that to you.”

Ms Hornery was awarded the 2012 Association of Financial Advisers (AFA) Female Excellence in Advice Award.

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Women worried about their retirement funds: MLC

Ahead of International Women’s Day, MLC is raising awareness about the importance of superannuation and the amount of savings women will need in retirement.

Women retire with 40% less super than men which means too many women are risking a very basic lifestyle in retirement.  Additionally one in four women will have little or no super at retirement age.

MLC spokesperson Lara Bourguignon said this International Women’s Day MLC is encouraging women to take an active interest in their super to help overcome the retirement savings shortfall.

“While the issue is on the minds of most Australians, people are not doing enough about planning for their retirement, particularly women who have a larger savings shortfall than men,” Ms Bourguignon said.

“International Women’s Day is about empowering women financially and so it’s a great reminder for women to take some small steps today to make sure they have enough superannuation to last through retirement.”

MLC data about women and super shows:

• Australians are living longer – and women live longer than men (a 60 year old male is expected to live on average to 85 and a 60 year old female to 90)
• The average super balance for men in Australia is just under $300,000, but the average super balance for women is just $195,000
•  56% of Australians expect a financial shortfall at retirement and one third of women (36%) say they’ll have far from enough money at retirement
• Women retire with 40% less super than men as they take time out to care for children and their elderly parents, and often work part time
• Women experience significant economic inequality.  A young woman of 25 today will earn almost 50% less over her lifetime than a young man of the same age
• 47% of women are unprepared for retirement
• Almost half (45%) of women think they will struggle to make ends meet or just be able to afford the basic living expenses in retirement
• Just 35% of women have a formal retirement plan in place compared to 43% of men

Top tips for women to boost super:

• Awareness is the first step in taking action.  Take action today and don’t wait.  Think about the retirement lifestyle you want, how much you might need to retire on (use an online super calculator) and check out what your super balance is.
• Seek financial advice – find out how you can maximise and protect your super and how it complements your other investments like the family home.
• Consolidate and sacrifice your super – your superannuation is real money and it’s yours, so look at it like any other savings account.  Changing simple things today like finding lost super, consolidating your super and sacrificing a couple of extra dollars each week of your salary can make a big difference.
• Co-contribution – low income earners should consider making the most of the Government’s co-contribution scheme.  If you earn under $48,517 and make a personal after-tax superannuation contribution, the Government may contribute up to $500 per year to your super.
• Income – consider investing in a pension product with longevity protection that eliminates the risk of outliving your savings.

“It’s never too early to start planning for retirement.  It’s really important women take action today to secure the retirement lifestyle they’ve imagined and deserve,” she said.

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Women most concerned about their super: MLC Australian Wealth Sentiment Survey.

Australians are worried about having insufficient funds for retirement, according to the inaugural MLC Australian Wealth Sentiment Survey.

The MLC Australian Wealth Sentiment Survey takes a pulse check of how Australians are feeling about their wealth.

The survey found Australians remain very cautious on the outlook for the economic environment and are focused on deposits and paying off debt. Meanwhile, consumer appetite for risk will increase marginally over the coming months – with a growing desire to put more into property and shares.

It also found Australians are very concerned about saving for their retirement – especially women.

Key superannuation findings:
· When asked to rate their current concerns about risks in super and investments on a scale of one to 10 (low to high concern), at an average 7.02, women are the most concerned about inadequate savings in retirement (compared to males at 6.74).
· Looking more closely by age, females aged 50+ were the most concerned (at 7.21), compared to their male counterparts of the same age (6.22).
· Males are typically more concerned about missing investment opportunities.
· Those within 5 years of retirement tend to invest more conservatively for income than growth. However, females aged over 50 are more than 60 per cent more likely to nominate this strategy than their male counterparts (9.92 per cent to 6.06 per cent).

“With people living longer, having extended retirements and being much more active in their retirement, the harsh reality is most people won’t have enough savings to fund their retirement,” NAB Wealth Group Executive and MLC CEO Andrew Hagger said.

“For women this especially rings true, as women retire with 40 per cent less super than men because they take time out for children, are more likely to work part time and typically earn less than men.

“While it’s not surprising to us that women are worried about funding their retirement the survey is a timely reminder to women about how they can start to bridge the gap by adopting some key savings strategies.”

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Rice Warner introduces female super ininiative.

Consulting firm Rice Warner has adopted an innovative approach to bridging the retirement savings gap for its female employees. The initiative addresses a fundamental gender imbalance that affects the retirement incomes of a majority of Australian female employees.

Rice Warner today released details of what is believed to be a first for an Australian business – offering its female employees a package of benefits designed to bring their expected retirement savings outcomes into line with those of their male counterparts.

The new arrangements commenced on 1 July 2013. It means Rice Warner’s female employees will be provided with a package of benefits – including flexible working conditions, generous paid parental leave, superannuation payments and long service leave accrued during parental leave, access to an educational program – and an additional superannuation payment of 2% of salary.

Rice Warner Deputy CEO, Melissa Fuller, who led the firm’s research into the retirement savings gap for females, said her investigations helped spark her interest to uncover a practical solution suitable for Rice Warner, in respect of its own female staff, to help redress the financial wellbeing challenges faced by females in retirement.

“From the outset Rice Warner saw an opportunity to tackle a systemic issue that has a broad impact on Australian females and society, but which also directly impacts our own female employees. Our business enjoys a leading position as an independent voice in the superannuation sector, so naturally it was an area we felt equipped to explore, canvass some options and adopt our own policy,” said Ms Fuller.

“As a consulting firm advising superannuation funds, Rice Warner is an expert in the field. We understand the underlying data and statistical evidence that clearly shows a stark reality that most females fall behind males in their level of retirement savings.”

“We also wanted to make a difference by showing others that with resolve, the savings gap can be dealt with. I am proud of the way our entire team has supported this package,” she said. Ms Fuller also consulted with the Australian Human Rights Commission to ensure that the initiative does not discriminate against males. The Commission considered that the package of measures was likely to be considered a special measure designed to achieve substantive equality between men and women.

We can now move forward with confidence showing other Australian employers they too can proactively support similar arrangements for their staff. Ms Fuller, with the support of Rice Warner senior management and the Board, said it makes sense to leverage the firm’s superannuation expertise and understanding of the issues to improve the outcomes for its female employees.

“This is an important employee benefit, designed specifically around the issues females face in saving adequately for their retirement. Of course we can’t control inequities within society or the superannuation system, but we are pleased to show positive change is possible by focusing on those areas where we can make a material difference”.

Superannuation Savings Gap Facts

• The total female savings gap is $383 billion.
• On average, 65 year old females today retire with approximately $40,000 less than 65 year old males.

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