Lyn retired with little super and was unable to pay the rent

Lyn Bailey lived a comfortable life before her divorce, travelling overseas and even putting her four children through private school.

She never expected to be staring down the barrel of homelessness.

“I was looking forward to my future and my retirement. It was all pretty rosy,” the 73-year-old told 7.30.

After her divorce was finalised, Lyn thought she would be able to buy herself a unit along the coast of New South Wales with her share of the proceeds from the sale of the family home.

The bank told her it would not lend money to someone in their late 50s.

Read: Mortgage debt ruining retirements

“For the first time in my adult life, I had to find somewhere to live to rent,” she said.

Lyn also found herself with very little superannuation at retirement age.

“Before the divorce, I didn’t have a lot of super sitting there because of my nursing career, because of my time out to have kids and all of that,” she said.

Once she retired, Lyn found she could no longer pay her rent. (ABC News)

“But once the divorce had gone through and was finalised, I found myself with even less super.”

She managed to keep her head above water for another 10 years, renting as she continued working past retirement age as a midwife.

But when she finally left the workforce, Lyn didn’t have enough money to continue living in a private rental. 

Read: Renters face homelessness risk

Her story is not uncommon. Australian women in their 50s and 60s are the fastest-growing cohort in the banks of Australia’s homeless.

The options left to retired women without a good super balance to fall back on are often staying with friends or family, living in their car or couch surfing in crowded homes.

Lyn was lucky enough to find secure accommodation through the NSW Housing Trust, but she knows not all women her age are as fortunate.

“It makes people angry when you can’t find somewhere to live,” she said.

“If this had not come up, I don’t know, would I have been living out of my car?”

Playing catch-up from the beginning

Why women are playing catch-up from the start of their careers.

To put Lyn’s experience in a broader context, it is worth comparing the systemic factors that cause many women to play economic catch-up from the very start of their careers.

Male undergraduates, on average, earn 2.5 per cent more than their female counterparts ($65,000 and $63,400 respectively) straight out of university, according to the 2020 Graduate Outcomes Survey by the Quality Indicators for Learning and Teaching (QILT).

Read: Poverty, homelessness among older Aussies shows biggest jump: report

Throughout their lives working full time, men earn 14.2 per cent more than women on average, or $1 for every 85.8 cents, according to the latest Workplace Gender Equality Agency (WGEA) pay gap data.

Women from First Nations backgrounds are also further disadvantaged, earning a third lower in their median weekly income than non-Indigenous Australians. Disabled women are also twice as likely to be unemployed.

If women choose to take time out of the workforce to have children and come back to work part time – something much more common for women than men – women can miss out on being the next up for promotion. This is also reflected in the data. According to WGEA, women make up only 32.5 per cent of key management positions, 28.1 per cent of directors, 18.3 per cent of CEOs and 14.6 per cent of board chairs.

At retirement, on average, men leave the workforce with almost 30 per cent (27.6) more super than women, the latest Retirement Income Review putting the median balance at $128,507 for women and $163,985 for men.

The super gap will never close

Lyn feels fortunate to have found secure accommodation with the NSW Housing Trust. (ABC News)

It’s not just older women in 2021 who face a retirement pinch. New research shows the super gap will hang around for the next generation of women too. 

Modelling provided exclusively to 7.30 by Di Johnson of Griffith University shows that with the current superannuation settings, no matter what women earn, or what age they are, they will on average retire with less than men in the same wealth bracket. 

“Even with generous assumptions, such as taking no career breaks, 2.5 per cent wage growth, 7 per cent long-term returns, very low fees, the gap between men’s and women’s super balances across the income spectrum will never be closed,” Dr Johnson said.

Di Johnson says super works best for people on higher incomes who never take a career break. (Supplied)

Dr Johnson’s modelling shows that middle-income earners, women who are in the 50th percentile of wealth, will consistently be 25 per cent behind on their super balances. It is a similar story across various income percentiles and age groups.

“Super works best for those on higher incomes who never take a break to care for others,” Dr Johnson said.

“Those members also get the lion’s share of the $40 billion in tax concessions benefitting members every year, and growing. 

“No choice any individual woman or person earning a lower income makes is going to close the gap which is entrenched through structural disadvantages in the Australian labour market, superannuation system, tax system and in a culture of wilful blindness to bias, racism and sexism.”

Watch part one of 7.30’s four-part women’s special tonight on ABC TV and iview.

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