Urgent super reform needed now, ASFA warns

Low confidence in retirement among women has broad social implications: ASFA chief.

Urgent super reform needed now, ASFA warns

Low confidence in retirement among women is a clear indicator that more must be done to improve women’s retirement outcomes, says the Association of Superannuation Funds of Australia (ASFA).

The most recent results from the Qantas Super CSBA Retirement Confidence Index (RCI) show that women have far less confidence than men that they will have enough money for a comfortable retirement.

The RCI is a quarterly barometer of Australian adults’ retirement confidence and asks respondents to rate their confidence in having enough money to retire comfortably, awarding a score of between 0 and 10, where 0–3 represents little to no confidence, 4–6 some confidence and 7–10 indicates a high level of confidence.

Although the gender gap has closed slightly on the previous quarter, the RCI found that women were awarded an overall retirement confidence rating of 4.8 compared with 5.4 for men.

Only 30 per cent of women say they have a high degree of confidence they will have enough money for a comfortable retirement, compared with 39 per cent of men.

Cost of living/inflation was the most mentioned external factor causing difficulty in planning retirement, closely followed by the global economy and general high cost of living.

“These findings highlight deep concerns around the realities of retirement for women and the perception that they will not be able to adequately fund a dignified retirement.”

ASFA chief executive Dr Martin Fahy said: “The lack of confidence reflects how women are retiring today, with average balances at retirement a little over half those of men. While the gap is gradually closing, more needs to be done to address the disparity.”

Median super balances for men and women in 2015–16, according to ASFA, were:

  • 50 to 54-year-old men $99,000; women $45,000
  • 55 to 59-year-old men $115,000; women $50,000
  • 60 to 64-year-old men $110,000, women $36,000
  • 65 to 69-year-old men $32,000; women $9900.

Average balances in 2015–16 for all people aged 15 and over were $111,853 for men and $68,499 for women.

Dr Fahy said important social policy issues arose due to women’s lower super balances and that narrowing the gap would lead to better standards of living in retirement for women.

For example, 52 per cent of Australians living in poverty are female, according to Poverty in Australia 2018 prepared by the Australian Council of Social Service (ACOSS) and the University of NSW.

Dr Fahy said: “Structural policy reform to protect and enhance the economic security of women in retirement is something that ASFA has long advocated for. It is of critical importance to ensure that women are not condemned to experiencing poverty, and even homelessness, in retirement.”

“Today, around 50 per cent of women retire with a very low superannuation balance under $50,000, compared with 33 per cent of men. Unless we take active steps to fix this problem, confidence will remain low.”

He said ASFA continued to advocate for policies to improve women’s economic security in retirement, including:

  • paying Superannuation Guarantee on paid parental leave and other income replacement payments (such as salary continuance and worker’s compensation)
  • removing the $450-a-month threshold for Superannuation Guarantee
  • maintaining the Low Income Superannuation Tax Offset (LISTO) that provides tax refunds and makes superannuation fairer for those on low incomes
  • enabling employers to contribute more for women without being considered to have breached anti-discrimination legislation.

“While we continue to advocate for policy improvements, the good news is that there are a number of steps that women can take to increase their confidence and improve their retirement prospects,” said Dr Fahy.

ASFA recommends four easy steps:

  • Open your mail from your super fund and look at your account balance
  • Use a calculator tool, such as the one on ASFA’s Super Guru website, to find out whether your savings are on track
  • Learn on Super Guru what you can do to improve your balance by contributing a little extra and letting the power of compound interest do the rest
  • Talk to your super fund to find out whether your money is invested the right way for you, according to how much risk you are willing to take on.

Are you diligent about checking how your super is faring? Are you confident your fund is performing well? Are you confident your super is in the best investment category for your goals?

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    COMMENTS

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    MICK
    4th Apr 2019
    10:39am
    The next feminist story claiming disadvantage. It just never ends.
    For the record men do NOT have a comfortable retirement for the most part. Also women share their partner's super if they have a partner, which many do.
    Its not bad enough that women get most of the health budget for breast cancer research and treatment (whilst crying they need more) and have all of the top jobs in media but the continual cry for more is quite perverse.
    Sure there are areas where things need to change but not all things are equal in this world and there's often a good reason why this is so. I'm so over the media criers who seek to push their own barrow. Is it Friday already? Almost.
    Cowboy Jim
    5th Apr 2019
    10:41am
    Hey Mick, maybe we blokes could complain about women living 4 to 5 years longer on average. Just look at the clubs out here, 80% of the over 70s are female.
    GeorgeM
    4th Apr 2019
    11:51am
    Agree with MICK's comments above, the Feminists barrel is once again being pushed in YLC.
    The reasons why women have less is NOT because of any gender gap which DOES NOT exist in Australia, but due to what they actually do:
    a. They have to take time out to have kids & bring them up,
    b. They have more responsibility (being MOTHERS) for looking after kids and, being at home for this, naturally have more focus on house duties, and
    c. Accordingly many take on lighter jobs with less focus on careers.

    No problem for equality in income / wealth if they decide not to have children - as MICK has noted there are too many already at the top in the media. Also, too many MPs in the Labor party (quota system) hence that party lacks quality due to their quota system downgrading more competent men.

    Also, Dr. Fahy is a joker who has got sucked in by the Feminists lobby issuing out such biased, selective statistics (called lies as they mislead). He, and all in the media, should instead focus on the COMBINED Super of Couples, or else focus on Individuals who did NOT have children to compare men & women, to make comparisons valid. The Media also needs to focus on promoting Marriage as the means to having men and women share their jointly earned wealth, not try to put women against men. It will be hugely beneficial for children also who are victims of broken marriages (and go off the rails) encouraged by the media and feminists.
    Charlie
    4th Apr 2019
    12:42pm
    What a crisis, my overall retirement confidence rating is lacking.

    Should I question the person who designed the study, the quality of the information that went into it, or just find another study that disagrees with it.

    The existence of a study does not guarantee the accuracy of the outcomes.
    Old Man
    4th Apr 2019
    1:14pm
    The answer is so simple - men work more hours than women, men don't take time out to raise a family. Super is paid on the basis of hours worked.
    Cowboy Jim
    5th Apr 2019
    10:45am
    My wife had more in super, simply because she could salary sacrifice. I was not allowed to do that and we used my wages for our living expenses. So Old Man you are quite right with your comment, just my situation was reversed.
    Golden Oldie
    7th Apr 2019
    12:20pm
    Old man, you left out a vital word in your comment, the word "paid" before "hours". Women have less paid hours because of family responsibilities. I needed to go back to work when I had 2 children under 5, one not yet toilet trained, because my husband left. I found the work, for 8 hours a day, much less frustrating than being at home looking after 2 children, being at the beck and call of a husband trying to run a butcher shop, delivering meat, getting shop supplies, doing the bookkeeping and banking, and having to juggle the bills because there never seemed to be enough money to get ahead. I was working lots of hours, just never got paid for that.
    Gammer
    4th Apr 2019
    1:46pm
    I took advice from my super fund (my husband had passed away in his late 50’s and all his super went to his grandson - 2nd marriage...) and salary sacrificed for a few years... as soon as I could I took the transition to retirement option so that most of my last few years of salary went into my super fund. I have now been in full retirement for 6 years and, despite my drawing a monthly ‘pension’, my super balance is actually more than when I finished work. I think we all, both men and women, need to seriously consider our personal circumstances and make the appropriate decisions. A good financial advisor/super fund helps, of course!!
    Rae
    5th Apr 2019
    7:51am
    Yes it is a sacrifice and too many refuse to make it. All sorts of reasons why they can't.

    Or why they can't live on perfectly adequate incomes either.
    dee
    4th Apr 2019
    3:51pm
    Look Life Choices Trolls, they say a 9% difference in confidence and an extra 2/4% in poverty. Don't get your jock straps in a twist.(top jobs in media, I don't think so) Gammer seems to be the only one acting like a mature adult here, stating what actually worked for her when hubby's super didn't work out. Very wise move indeed Gammer. You can search any article on this site that mentions issues that particularly relate to women and the same bunch of sour old men will have been harping on and patting each other on the back for their negativity. I find that most women are reluctant to join in the conversation here because of them and their bullying tactics. Only stopping in briefly to look at budget issues, but for the most part I avoid this site because of these know-it-all trolls.
    Old Man
    4th Apr 2019
    5:17pm
    I agree, dee, that Gammer has done the right thing. I have always advocated that anyone who needs to know anything about super and retirement should seek the opinions of a good financial adviser.

    I have posted a comment here that is high on facts and low on denigration of females per se. This subject of women having less super than men is more regular than an Allbran user and the reason has nothing to do with the fairer sex being women but states a simple fact that those who work more hours get more super.

    There are many and varied reasons why women work less hours than men and that is another topic completely. In our case, my wife chose to be a stay at home mum , got some part time work while the children were at school and full time work when they had all left school. This is not for all women and I respect those who choose a different path without reservation. I will not accept the epithet of being "sour", yes old but not "sour".
    Charlie
    4th Apr 2019
    5:46pm
    At last I've become a successful bully.
    Old Geezer
    4th Apr 2019
    5:04pm
    Too many handbags and shoes.
    Cowboy Jim
    5th Apr 2019
    10:47am
    You are thinking of Julie Bishop, haha. She can afford them.
    old frt
    4th Apr 2019
    5:16pm
    Sorry Mick I can't believe you missed the fact that all the proposals mentioned in the YLC article above are ALP policy proposals ,check with Penny, smoked one to many Bongs and Tanya Commosec . Yes some suck but others are a fact of life.
    Alan
    4th Apr 2019
    11:31pm
    I have had a good financial adviser and a good accountant and managed to save significantly during my working life. I now pay no income tax.

    I now enjoy a very comfortable standard of living spending about three months a year on overseas travel and most years the value of my super fund increases by more than five percent - the amount that I am required to take out from the fund each year. I don't have any need to change my retirement lifestyle (been retired for 15 years).
    Cowboy Jim
    5th Apr 2019
    10:49am
    Congratulations are in order, I think.
    Rae
    5th Apr 2019
    7:47am
    Teaching girls and women to be independent would also work.

    Women are still being convinced they must be dependent on a father and then a husband.
    Then on the Government when it all goes wrong.

    Besides Superannuation is proving to be unviable for all but the top 20% of income earners.

    A universal pension using the tax concessions currently going to superannuation contributions would be a better fix. Give everyone the same aged pension. Teach a bit of budgeting and saving strategies. The Superannuation system itself is based on other people "looking after you" and being paid heaps to do it. All those billions going to pay for the Superannuation Industry itself could be better used in my opinion.
    Blinky
    1st May 2019
    3:26pm
    Why would women be treated differently? That is called DISCRIMINATION.
    What needs to happen is:
    1. Allow people to salary-sacrify more, without taxing them or penalizing them.
    2. Increase either the low asset threshold or allow the first $100k 8n super to be exempt from the asset threshold.
    3. Reverse Hockey's taking $3 × every $1k pensioners have over the threshold n make it $1 × every $1k ag again.
    4. People who can afford their own pensions r not a burden to the govt as they do not depend on Centrelink. Leave them alone. They r always being targettef by greedy treasurers.
    5. STOP CHANGING the rules all the freaking time. Rules should only change to improve the pensions system not to be detrimental to pensioners.
    6. Make ir harder x greedy treasurers to take money away from prnsioners. Pension reforms should be agreed to by the senate, not just by a treasurer or a prime minister alone.
    7. Negative changes to the pension are stressful that is detrimental to pensioners psychological health.


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