Health and community services workers, most of whom are women, are retiring with a super balance of just $53,000.
With more than 80 per cent of the workforce made up of women, modest incomes, the fact that many have taken breaks in their working careers to raise children and that they haven’t had super for their whole working life, means their retirement balances are less than half the national average.
Industry super fund HESTA, which is the largest super fund dedicated to the health and community services industry says the average retirement balance for its members is $53,000.
The national average for women was $112,600, according to Association of Super Funds of Australia research.
In a survey to its members, HESTA found that one in four women feel disengaged with super, and more than 40 per cent feel that they will need more than $500,000 to retire.
“The reason they’re not very engaged in retirement is often they don’t know what to do,” HESTA’s chief executive Debby Blakey told AAP.
“They see media articles saying they need $1.5 million to retire, for many of our members that just looks like such big numbers, they think oh that just doesn’t apply to me.”
Raising the compulsory superannuation contribution to 12 per cent instead of the current 9.5 per cent would be the best way to increase people’s super contributions, she believes.
Alternatively, putting away $20 a week could mean an extra $50,000 for their retirement balance if they start at age 35.
“It might be looking at when you get a salary increase, if you can put away a portion of that salary increase, before you’ve gotten used to getting it, it’s an option,” Ms Blakey said.
ANZ recently announced it will pay an extra $500 a year to women employees with low superannuation balances in an effort to close the gender gap in retirement savings.
The government is also considering and option to lift the tax cap on contributions to allow working mums to top up their super when they return to work without copping a tax penalty.