How women can maximise their superannuation

It’s no secret that women retire with less super on average than men. In fact, more than 80% of women are currently retiring with insufficient superannuation savings to fund a comfortable lifestyle.

We also know that women are more likely to take time out of the workforce to care for family and are more likely to be in part-time or lower paid employment. Women also are less likely on average to receive the benefit of contributions above the compulsory Superannuation Guarantee rate.

With all of this in mind, there can be a cause for concern for women when looking at the stability and longevity of their retirement funds.

But no matter what the circumstances are, it’s vital that women take simple, but concrete, steps to help maximise their superannuation.

There are some simple steps you can take to maximise your superannuation, regardless of your situation. These include:

1. Consolidate into one fund. Consolidating your accounts and/or tracking down your lost or unclaimed super could save you thousands of dollars in unnecessary super fund administration fees, which over time can make a massive difference to your retirement savings. You can check the Australian Securities and Investment Commission (ASIC) MoneySmart tool for finding unclaimed money, in case you’ve lost track over the years.
2. Check if you’re eligible for the Government Co-Contribution. If you earn less than $50,454 before tax, you may be eligible for a government co-contribution to your super if you make an after-tax contribution yourself.
3. Take active control. While this may sound obvious, many people treat superannuation as ‘out of sight, out of mind’. But when you take an active interest in how your super is performing and what you are entitled to top it up by annually, you can really start to make a difference to what you’ll accumulate by the time of retirement.

Speak with your employer about directing some of your pre-tax salary into super. These ‘salary sacrifice’ contributions are taxed at the concessional super rate of 15% (30% if you earn over $250,000) instead of your marginal tax rate.

When you finally retire, you can withdraw your money tax free. Just remember to stay within your concessional contributions cap of $25,000 a year, which includes compulsory SG payments made by your employer.

And thanks to the magic of compound interest, even small amounts of money invested early can make a big difference in the long run. When your budget allows, consider putting a little extra in super.

You can make a tax-deductible contribution up to the $25,000 annual concessional cap, but be aware that this cap includes employer contributions and salary sacrifice.