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Women may have made great gains in closing the social gap between the sexes, but more work remains to be done.
Research conducted by Rice Warner Actuaries on behalf of the Investment and Financial Services Association (IFSA) has revealed how trying to mix a career and family will leave many women disadvantaged in their later years.
IFSA is urging for superannuation payments to be included in any paid parental leave scheme voted on by the Parliament. IFSA chief executive John Brogden said Australian women face a “grossly inadequate” retirement due to lower superannuation savings.
“The research clearly demonstrates that Australian women are punished for having children. They will have low superannuation and a poor retirement income just because they chose to have a family,” Brogden said.
The research highlighted other concerning facts about the working conditions for Australian women who have children.
Women who have children are likely to spend time away from work, as well as having periods of part-time work. This leads to lower superannuation contributions — but it’s not the only disadvantage.
The research confirmed what many working women feared: periods out of the workforce may lead to missed promotional opportunities. Many careers advance between the ages of 30 and 40, which is also the prime age range for raising children.
The report also pointed to Australian Bureau of Statistics (ABS) data that showed women receive lower pay than men for identical work. ABS data shows the average full-time ordinary earnings for women are approximately 82.5 per cent of the male average equivalent.
The IFSA/Rice Warner research found a woman who takes a five-year career break will save about 26 per cent less than her counterparts who remain in the workforce — and that figure doesn’t include a lower salary resulting from missed career opportunities.
Rice Warner’s estimates show that a ‘typical’ woman will save about $91,000, or 35 per cent, less than a typical man.
And the bad news doesn’t end there — women also need more money than men in retirement due to their increased longevity. The research found while about 60 per cent of Australians enter retirement with a partner, many spend the bulk of their savings in the first 15 years.
“In the majority of cases, the male partner dies first and many widows then spend the later years of their retirement relying on the age pension,” the report said.
The authors of the report issued a call to action for Australian women, pointing out potential financial risks for married women such as divorce or becoming prematurely widowed.
“All working women have their own superannuation account, and they need to build it to protect themselves against future uncertainty,” the report said.
