As a woman, your superannuation is at peril of being a damsel in distress but don’t wait for Superman, save yourself.
Figures released by the Association of Superannuation Funds of Australia showed that in 2009, super payouts to women were less than half that of men. Considering women tend to live longer than our male counterparts and people are living longer in general these days, that’s a pretty alarming statistic. The pension is close to the poverty line and nobody wants to spend their sunset years scrambling for pennies.
Don’t rely on your house or your spouse
It is often said, “a man is not a financial plan” and never a truer word was spoken. You can’t predict the future of a relationship so don’t bank on him always being around. And let’s be real, the only men who find gold diggers attractive are really, really old.
Similarly, you can’t rely on your house as a retirement plan. Even if you do still have it when you retire, chances are you will want to live in it. New consumer credit laws mean banks can’t give you credit unless they reasonably believe you can pay it off (read: have a good job and will do for a long time). Second mortgage at seventy? Forget it.
So your relationship’s gone horribly wrong and you’re separating. Don’t despair, not all is lost! If you are a spouse or a de facto partner, you could be entitled to a share of your ex’s super.
The Family Court recognises that a woman will often perform household duties, such as childrearing, that enable her partner to earn income while she herself earns nothing. As such, the Court may order that your ex’s super be split and your share, be transferred into your super account.
The flip side of course, is that he could be entitled to a share of your super too if the situation is reversed, so seek advice from a family property lawyer before demanding your slice of the pie.
Leave It Alone!
Current law allows people to withdraw their super early in times of duress such as if you’ve defaulted on your mortgage and your house is being repossessed, or you’ve become terribly ill and need say, a wheelchair. Obviously when times are this tough you might not always have a choice, but I urge you to think long and hard about withdrawing your super early.
If there’s any other option, take that instead. Remember, you’re not going to get that super ever again.
Top It Up
I have a friend who often comments that compound interest is the greatest thing ever invented by humanity and frankly I think she’s dead right. If you’re in your 20s or 30s adding as little as $20 a week can make a huge difference in the long term. Plus, for every extra dollar up to $1,000 you contribute, the Government will match it 1 for 1. Hello, free money!
If you’re closer to retirement, you’ll want to look into some serious salary sacrificing. Mind the cap though; if you’re under 50 you can contribute up to $25,000 a year and if you’re over 50, up to $50,000, but every dollar over that will be taxed at 46%- yowch!
Statistically, women are shown to be better at saving but for some reason, we have less superannuation. Considering super is really just a big savings account, we should be good at this! Put in a little extra and be your own hero, no superpowers required.