With International Women’s Day, the Australian Taxation Office (ATO) is urging women to take important steps to maximise their long term retirement savings.
Sustained pay inequality, a high prevalence of participation in part time work and extended career breaks taken for family caring needs has led to a significant super gap between men and women’s retirement savings. Industry research shows that, on average, Australian women retire with super account balances of just $112,600. This is about 43% less than the average man’s super balance of $198,0001.
Megan Yong, Acting Deputy Commissioner, Superannuation says women can make small yet significant changes to help build a strong financial future.
“The small things you do with your super now can have a big impact on your lifestyle when you retire. Quite simply, if you want to enjoy a lifestyle of your choosing, you need to make some important decisions now,” she said.
The ATO says it is important to check that your employer is paying the correct amount of super on your behalf.
“If you’re eligible for super, your employer must pay into your super account a minimum of 9.25% of your ordinary time earnings at least every three months. You can check your annual statements, or check your super account online if your fund offers this service.”
“Remember, you can usually choose the super fund you want your super paid into. If you already have a super account and are changing jobs, or have returned to work part-time after a break you don’t always have to open a new account,” Ms Yong said.
Ms Yong advises individuals to check their super fund has their tax file number (TFN) to make it easier to keep track of super throughout their career, as well as reducing the tax payable on super contributions.
Women are also encouraged to register for the ATO’s online services and use SuperSeeker to view all their super accounts, track down any lost super and combine any unnecessary accounts into their chosen fund,” Ms Yong said.
With superannuation accounting for approximately one-tenth of a person’s income, Ms Yong encourages women to see the money as their own, and look after it accordingly.
“You may not see your super payments in your hand each week, but it’s still your money, and it will influence your lifestyle in retirement. By checking other things such as whether you are entitled to government co-contributions as a low or middle income earner, you can build your super balance over time,” Ms Yong said.
For women who are running their own business, it’s important to remember to invest in super for retirement. Most self-employed people can claim a full tax deduction for contributions they make to their super until they turn 75 years of age.
“It’s fairly straightforward to get your super sorted. You can use the ATO’s online services or speak to your super fund. There are plenty of resources available to help you look after your retirement savings. The key is to get it sorted now, wherever you are in your career,” Ms Yong said.
Check your super statements
– Is your employer paying the correct rate (amount equal to at least 9.25% of your pay) each quarter?
– Does your statement correctly show all contributions, insurance and fees?
Make sure your super fund has your tax file number.
– You’ll pay more tax
– It’s harder to keep track of current and previous super accounts
Keep track of your super using SuperSeeker
– Check your super accounts
– Find lost super
– Transfer super to your preferred account
– Go to www.ato.gov.au/superseeker
Consider government contributions
– A government co-contribution can boost your super
– See if you qualify and what you need to do at www.ato.gov.au/boostmysuper
Put extra money into your super
– Make extra payments into your super fund account
– ‘Salary sacrifice’ or make contributions from after-tax pay.
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