I’m going to wade in on something a bit contentious – the gender super gap which is, in short, women retiring with significantly less super than men.
Before I do, I’ll get a couple of things out of the way:
Q: Is the gender super gap even a thing?
A: Quite simply, yes. Studies show women retire with about 42% less super than men[i]
Q: I’m a guy, do I need to bother?
A: If you have a partner, mum, sister, wife, or aunt, yes it’s worth a read.
Q: Are there any real effects of this super gap?
A: Yes. Super is part of a comfortable, safe retirement. Less super means higher rates of poverty, lower quality of life. 38% of single elderly women in Australia live in poverty[ii]
Towards the end of last year, I heard a discussion on the “social constructs of gender inequality”. ‘Riveting stuff’ was what I started thinking. As I listened, whilst plenty went through to the keeper, there were parts of it that bothered me.
Sometimes you come across a situation, an idea or concept that just strikes a chord. I started doing some reading on the gender super gap, cause and effect.
As the stereotypical numbers guy, I opened up a fresh excel sheet and started to put some numbers to it.
The gender pay gap is well known, well documented, the gender super gap, less so.
Neither are well addressed.
On reflection, a significant difference in super balances is something I expect to see as an adviser.
I’d never stopped to think why or help address the imbalance, but that’s about to change.
The issue at hand and knock-on effects
Contributing factors to the super gap:
1. Lower pay (the gender pay gap) [iii]
2. Women have more time out of full-time paid work to look after family which means less income. [iv]
3. Because of the way our super system is set up, 9.5% of a lower income means there’s less super at retirement.
4. Less super in retirement means less to support you and a higher reliance on the Age Pension (currently a maximum of $66.67 per day as a single person[v]). Think about that for a minute.
Why is this important? Women over 55 are the fastest-growing cohort of homeless in Australia.[vi]
I find myself in a tricky spot – the structural causes of the gender super gap aren’t something I can solve. By outlining ways to close the gap and encouraging individual action may open me up to criticism but I’d rather say something than remain silent.
I’d love to see a government initiative to increase super guarantee when someone is working less to care for someone else (that could be caring for children or parents) including the paid parental leave scheme.
I’d actually love to see us replicate the Swedish system where irrespective of gender there’s an acceptance of more paid parental leave. [vii]
For some of the ways we might close the gap, check out the video below.
[i] https://www.wgea.gov.au/data/fact-sheets/superannuation-gender-pay-gaps-by-age-group
[ii] https://www.sandringhamwealth.com.au/wp-content/uploads/attachments/Women%27s%20economic%20security%20in%20retirement.pdf
[iii] https://www.wgea.gov.au/data/fact-sheets/australias-gender-pay-gap-statistics
[iv] https://aifs.gov.au/facts-and-figures/work-and-family
[v] https://www.humanservices.gov.au/individuals/services/centrelink/age-pension/how-much-you-can-get
[vi] https://www.humanrights.gov.au/our-work/age-discrimination/projects/risk-homelessness-older-women