At any point in your career, it’s essential to take a serious look into financial…
On average, women save about 50% less than men do when it comes to superannuation, and as such, many women are left vulnerable to financial issues when they finally retire. In fact, more women end up retiring with little to no super balance. Coupled with the fact that women tend to live much longer than men, these statistics sound problematic for women in Australia looking to live a comfortable and enjoyable post-retirement life.
As a woman, then, what can be done to ensure that there is enough superannuation fund before retirement? By following these effective superannuation strategies we’re going to share with you today
1. Do Salary Sacrificing
Due to a significant wage gap, women have to work a little extra to make enough for their retirement. This also indicates that women need to make additional contributions to their superfund on top of their employer’s contribution. This is referred to as salary sacrificing or concessional contributions. The amount to be contributed will be taken out of the pre-tax salary, and the employer can make the arrangements for the extra contributions to be made.
2. Look For a Better Super Fund
Not all super funds are created equal, and more often than not, the first superfund a woman gets to work with, although they are stuck with it, isn’t the best. There are much better superfunds out there, but research is required to identify these superfunds. Women need to take the time to research these superfunds to determine a better superfund to secure their future better
3. Consolidate the Super Funds
Typically, women will have way more super accounts than men do. In fact, men will only generally have one, while women will have six or higher. This affects the women’s ability to save money because having multiple accounts means paying multiple fees. As such, consolidating all super funds into one account is a great idea. This will significantly reduce the total cost, allowing women to contribute the money saved. Instead of paying fees for multiple accounts, you get to maintain a single superfund.
4. Pick a Growth Investment Strategy
Super funds are usually done through an investment strategy. You need to there are many investment strategies available. Some have a much higher risk than others. But because super funds are a long-term effort, it is recommended that women opt for growth strategies that typically have a higher risk. While there will be some years where the invested money will drop, the final results will generally be much better than what a conservative investment offers in the long run.
5. Make Non-concessional Contributions
As mentioned earlier, concessional contributions can be made on top of the employer’s super fund contributions to increase the saved amount. However, non-concessional contributions can also be made, and these amounts come out of the after-tax pay. With this amount, women don’t need to pay additional tax once receiving their super fund.
With these additional efforts, from making extra contributions to opting for higher-risk investment strategies, women stand a much higher chance of retiring comfortably thanks to the additional finances saved up.
That said, the strategy picked by each woman can differ from one and the other, depending on the future financial goals, the earnings made right now, and the like. If you are having trouble coming up with a strategy you feel confident in, do not be afraid to reach out for help. Professional financial advisers can offer you the assistance needed to come up with a solid plan that you can follow to ensure your retirement life is financially sound. Coastal Advice Port Macquarie offers personalised financial advice to help clients live their dream retirement life. If you are looking for financial planning services in Port Macquarie, book a complimentary meeting with us today!
DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.