Women Super

Reporter: Monika Kos

Right now, life's pretty good for Lauren Ockwell.. she's young, healthy, got a casual job, and living life in the moment. Lauren says "I mean, I've just finished university and so I'm not really thinking about my future financial situation just yet, because I haven't started my career." And at twenty-two, that's fairly typical.. the last thing on young people's minds is retirement. Lea says "below the age of thirty, most young people have quite different economic priorities, so they may be paying off their hecs debt, they may be paying off or servicing car loans, and perhaps house loans." But the experts say, they'd be wise to consider their broader financial future, too.. especially women.

Lea says " well a lot of women from the age of about 35 are probably still working part time or maybe not in the paid workforce at all because they're caring for children many of them may not be prioritising their future and they may find that they've left their run a little late." Lea Anderson from the Women's Law Centre says thinking about it sooner rather than later, will give them more time to save for a comfortable retirement. "Most women would, at retirement, would have half of the average male retirement income and we're seeing many women who are dependant on the aged pension, and who can't lead the sort of life they'd like to in their retirement."

Nick says "because the aged pension for a single woman, is for example, at the moment, is just thirteen thousand three hundred dollars per year, it's not a lot of money. So having some superannuation behind you is going to give you some reserves for you to draw on in your retirement years." Nick Bruining is a financial planner specialising in retirement issues.. and says women can be left behind. "One of the real problems is that women's work style is basically a lot of people doing part time work and similarly, they come out of the workforce for a period of time, perhaps to raise a family or things like that, so it's an unfortunate fact that a lot of women are low paid and equally they're part time workers." It might slow things down a bit, but women are can still secure their financial future.. and Nick says superannuation is a tax effective way of saving for retirement. His action plan involves five steps.

  • The first thing is, get a handle on your money.

Nick says it's important to understand budgeting, and managing debts.. the federal government has set up a website to help people do just that..

http://www.understandingmoney.gov.au/

  • The second tip is, make sure your boss is paying the super.

Nick says "a lot of people don't realise that if you earn more than 450 in the calander month, and that's before tax, your boss is required to pay nine percent into a superannuation fund." So make sure that's happening, especially women who work part time, who according to Nick, can slip through the net.

  • The third, make sure you access the co-contribution payment.

Now this little-known payment sounds too good to be true, but Nick says it is up for grabs, so take it. Nick says "if you earn less than twenty-eight thousand dollars before tax and you pay a thousand dollars into superannuation, the government's going to match it with one and a half thousand dollars for nothing." It's an easy way to boost your supa.. the process of salary sacrificing can help too.

Nick says "If you're earning more than twenty-five thousand dollars per year before tax, you can re-direct some of your salary into a superannuation fund, if your boss lets you do it. That way you're boosting up your retirement savings but you're also just paying fifteen percent tax on the money you've earned." So, earnings on your investment are taxed at fifteen percent, compared to your marginal tax rate, that can be as high as forty-six point five percent. "Now the downside of it is that you can't get at it until you retire, but some people think that's not actually a bad thing to have happen."

Nick's last point, and perhaps the most important thing women need to know, is HOW their superannuation is being invested. "A lot of the superannuation funds have a standard option which is a fairly conservative approach to investment. Now for a lot of younger women, we're going to be in superannuation for twenty-thirty years, it makes sense to have those funds in assets that are likely to improve in value, things like shares and property." So just recapping, get a handle on your money, make sure the boss is contributing to your super, access the co-contribution payment, salary saccrifice, and know how r super's invested... a five point plan to help WA women retire in comfort.

Lea says "it's never too late to start to fix up your financial future and to make some plans, and I don't think that young women in particular should think that one day their prince will save them, I think it's important to begin to take responsibility for your own financial affairs." Lauren says "I guess I still think I'm just a kid, I'm too young to start thinking about anything like that, but I probably really should, because in this day and age, everything is going too fast I guess."