Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 212

How to improve retirement outcomes for women

The average superannuation balance of women at retirement is about 60% of the average balance for men. According to a December 2015 ASFA research paper, for those with superannuation (excluding persons with a nil balance), the average balance for males was around $135,000, while for females it was around $83,000.

The gap is driven by a number of factors which include:

  • the lower workforce participation rate of women compared to men
  • a disproportionate representation of women in part-time and casual employment
  • the gender pay gap itself
  • interrupted working lives due to, amongst other matters, having children, and
  • the disproportionate amount of unpaid caring work undertaken.

Bleak retirement prospects

The problem is most acute for women who are way behind the level of superannuation required for a decent retirement and are currently in their early 50s with no realistic prospect of improving their super balance. The prospect for a reasonable retirement looks bleak indeed.

To add insult to injury, the age at which men and women will be able to access the age pension is progressively being increased to 67 years of age.

The consequence is that a woman now aged 60 without work will need to rely on the Newstart Allowance until she reaches the age of 67 when she may be entitled to the age pension. While men can be similarly disadvantaged, as a broad cohort, women will be in a far worse position.

Measures to address the super shortfall

To address this problem, The Tax Institute is broadly supportive of measures whereby the Federal Government would:

  • make a non-concessional co-contribution of $1,000 for all single women on a matched 2:1 basis where total assets held in superannuation in the name of the woman is less than $100,000
  • provide an opportunity for women who have had interrupted work practices to make catch up concessional contributions (a version of this will operate from 2019/20)
  • make modest changes to the anti-discrimination laws to give a clear legal basis to schemes introduced by companies to provide higher superannuation payments for female employees
  • provide for the age pension to be made available to single women who have total superannuation of less than $100,000 from the age of 60
  • provide a $1,000 per year superannuation contribution for an unpaid voluntary carer, whether male or female.

Two companies, ANZ and Rice Warner, have created schemes that are specifically targeted to benefit women. For example, ANZ’s female staff can be superannuated by the employer to the tune of an extra $500 per year in contributions. That is a step in the right direction but more needs to be done.

None of these ideas would come cheap, but the nature of the problem is acute and it should be addressed as a matter of urgency.

 

Bob Deutsch is Senior Tax Counsel at The Tax Institute. The Tax Institute is hosting a one-day forum in Sydney on 16 August 2017 where expert presenters will debate how to improve key areas of Australia’s tax system.

3 Comments
Richard Gutie
August 06, 2017

The reasons behind the female super gap as listed here are caused by different choices made by men and women, and by the fact that it is still men who are held responsible for bringing in most of the family income.

If women brought in the family income, went into areas of work that are as profitable as those chosen by men, did work that is as risky as that by men, there would be no super gap, and no gender wage gap either.

This makes the proposals listed in this article so sexist. Essentially the idea is to pay women more for the exact same work than men, to compensate them for the outcome of their own choices.

Another thing is that these proposals are gender based, not circumstance based. A women who is not looking after children gets the better deal even though she suffers no super gap, while a stay at home father who does suffer the super gap gets nothing.

A much better solution would be to 1) use the tax system to encourage couples to let fathers spend more time with their children and have the mother spend more time in the labour force; 2) make divorce outcomes more equitable.

David
August 06, 2017

Maybe companies could go further and continue to pay SG contributions whilst on unpaid voluntary care, whether male or female.

Kevin
July 28, 2017

Why not forget about super, and experts trying to make things complicated.

A while ago I said WBC after a small crash in 2002 buy @ $12 a share.Start super and that at the same time.WBC may outperform super over a 40 yr period just by using the DRP and paying no fees.

Periods out of work or having babies can then be funded by the dividends.husbands can also help to pay off the loan.There can be many reasons for non contribution to super.Lives sometimes fall apart.

In 2002 $12k was not a lot of money,I think they fell from around $14.50 a share so say they spent $15K.At least meeting the interest payment on that loan is vitally important,and not a lot of money.


Today $30k is not a lot of money,The interest payment is still small.WBC is just an example,leave it alone for 40 yrs to compound.

Experts and think tanks seem to have no problem at all at finding as many problems as you are prepared to pay them for.

 

Leave a Comment:

RELATED ARTICLES

Addressing the gender super gap

Australia’s shameful super gap

Work still needed to close the financial gender gap

banner

Most viewed in recent weeks

16 ASX stocks to buy and hold forever, updated

This time last year, I highlighted 16 ASX stocks that investors could own indefinitely. One year on, I look at whether there should be any changes to the list of stocks as well as which companies are worth buying now. 

UniSuper’s boss flags a potential correction ahead

The CIO of Australia’s fourth largest super fund by assets, John Pearce, suggests the odds favour a flat year for markets, with the possibility of a correction of 10% or more. However, he’ll use any dip as a buying opportunity.

2025-26 super thresholds – key changes and implications

The ABS recently released figures which are used to determine key superannuation rates and thresholds that will apply from 1 July 2025. This outlines the rates and thresholds that are changing and those that aren’t.  

Is Gen X ready for retirement?

With the arrival of the new year, the first members of ‘Generation X’ turned 60, marking the start of the MTV generation’s collective journey towards retirement. Are Gen Xers and our retirement system ready for the transition?

Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

What Warren Buffett isn’t saying speaks volumes

Warren Buffett's annual shareholder letter has been fixture for avid investors for decades. In his latest letter, Buffett is reticent on many key topics, but his actions rather than words are sending clear signals to investors.

Latest Updates

Investing

Designing a life, with money to spare

Are you living your life by default or by design? It strikes me that many people are doing the former and living according to others’ expectations of them, leading to poor choices including with their finances.

Investment strategies

A closer look at defensive assets for turbulent times

After the recent market slump, it's a good time to brush up on the defensive asset classes – what they are, why hold them, and how they can both deliver on your goals and increase the reliability of your desired outcomes.

Financial planning

Are lifetime income streams the answer or just the easy way out?

Lately, there's been a push by Government for lifetime income streams as a solution to retirement income challenges. We run the numbers on these products to see whether they deliver on what they promise.

Shares

Is it time to buy the Big Four banks?

The stellar run of the major ASX banks last year left many investors scratching their heads. After a recent share price pullback, has value emerged in these banks, or is it best to steer clear of them?

Investment strategies

The useful role that subordinated debt can play in your portfolio

If you’re struggling to replace the hybrid exposure in your portfolio, you’re not alone. Subordinated debt is an option, and here is a guide on what it is and how it can fit into your investment mix.

Shares

Europe is back and small caps there offer significant opportunities

Trump’s moves on tariffs, defence, and Ukraine, have awoken European Governments after a decade of lethargy. European small cap manager, Alantra Asset Management, says it could herald a new era for the continent.

Shares

Lessons from the rise and fall of founder-led companies

Founder-led companies often attract investors due to leaders' personal stakes and long-term vision. But founder presence alone does not guarantee success, and the challenge is to identify which ones will succeed in the long term.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.