The facts about women and super

Women are getting to retirement age and realising they don’t have enough money in their superannuation account to live on.

On this page:

  • Women and super: the facts
  • Why are women disadvantaged when it comes to super?
  • What can women do to help grow their super balance and achieve a comfortable retirement?
  • What else can women do to help grow their super balance?

Women are getting to retirement age and realising they don’t have enough money in their superannuation account to live on.

While horror stories about super and women are becoming increasingly common in the media, the overarching issue of women struggling to achieve a comfortable retirement is actually more common than you may realise.

If you’re a woman, the odds are stacked against you retiring happily-ever-after.

Here are the stats:

  • Women over 55 are the fastest growing group of homeless Australians[1]
  • 40 percent of older single women are living in poverty
  • 1 in 3 women retire with no superannuation at all.[2]

The age pension, which is the government benefits scheme for retired Australians, is barely enough to cover basic living costs.

On the pension (which, for individuals, is currently a maximum of $933.40 a fortnight), paying rent or a mortgage is out of the question, as is eating out at nice restaurants, buying non-essentials, going on holidays, or having any nice experiences that you finally have all the time in the world for but can no longer afford.

In fact, the maximum pension an Australian can receive is only thirty dollars above the poverty line.

Why are women disadvantaged when it comes to super?

The age pension was designed to supplement, rather than replace, the income of retired Australians. It’s just one part of a three-pillared retirement system that also includes compulsory superannuation and voluntary savings.

The modern superannuation system was designed to reduce the strain of an ageing population on the Australian economy, with employers contributing at least 9.5% of their worker’s wages to their super fund.

The problem with tying superannuation to earnings is that it puts women at a distinct disadvantage. Women don’t earn as much as men for a multiplicity of reasons, including interrupted work patterns, time out of the workforce to care for kids or ageing parents, the high cost of childcare, the gender pay gap (the average male full-time worker earns 20.8 percent, or $25,000 more than women[3]),and fewer opportunities at senior levels and higher paying professions.

Further, women typically live longer, which means their retirement funds (such as super) need to stretch further than men’s.

But there’s also a broader lack of awareness and engagement with superannuation that transcends gender. Retirement (and by extension superannuation) is seen as something “to worry about later”, which means people miss out on making the greatest gains from the compounding returns of superannuation.

What can women do to help grow their super balance and achieve a comfortable retirement?

ASIC recommends three things that women can do to help avoid retiring into poverty:

Consolidate super funds into one account;
Understand their super fund; and
Make extra contributions to super early in your working life.
The first two are quick fixes that you can knock over within a day.

While it’s not uncommon to start a new super fund with every new employer (36 percent of Australians have two or more super funds[4]),it also means you’re paying duplicate sets of fees and insurance for each fund unnecessarily. Further, you miss out on the additional interest you would have received from having a higher balance in the one account.

Consolidating your super funds is straightforward. You can do it from your myGov portal by clicking through to the ATO section and switching to the Super tab, or you can do it from the super fund that you want to consolidate your other funds into.

Next, understanding your super fund means knowing the fees you’re paying, the investment options you’re using, and the insurance products you’re paying for.

Getting the right balance across all three will depend on each member’s individual circumstances and preferences. For example, some women may be happy to pay their super fund a fractionally higher fee for the “ethical option”, which means their money is only invested in ethical and sustainable enterprises.

The third step is a longer-term play. The sooner you start making extra contributions to your super, the more you’ll be able to take advantage of the magic of compounding returns.

You don’t have to worry about saving a large lump sum of several thousands of dollars. Small but regular amounts will make a big difference to your super balance, particularly if you start making those contributions in your 20s.

For example, if you contributed $250 a month to your super fund (which is less than $10 a day), here’s what you’d end up with if you started at different ages (assuming an average annual investment return of 8%:

Age 25: You’ll have $878,570 by age 65
Age 35: You’ll have $375,073 by age 65
Age 45: You’ll have $148,236 by age 65

What else can women do to help grow their super balance?

There are several other ways women can grow their retirement savings.

Earning more money while you’re working is an obvious one. Even if you’re happy on your current salary level and comfortable in your role, the reality is that:

  1. you’re seven times more likely to take time out of the workforce to care for children and/or ageing parents[5],so you should make the most of the time you’re able to work; and
  2. you’re also working to fund your retirement.

Less obvious is making sure to claim any personal super contributions you make to your super as a tax deduction, and then reinvesting that money into your super.

Women who put their career on hold to have kids should also consider asking their spouse to share their super contributions with them. If you’ve decided to share a single income stream so you can take time off work to look after kids, then it’s only fair that the superannuation earned off the back of that income is shared as well.

This can be done by splitting concessional contributions (which include employer and salary sacrifice contributions) from the previous financial year or making an after-tax contribution. In both cases, the income earner gets a tax benefit, and the low-income earner also receives a government co-contribution of up to $500.


[1] Women in Super – Women and Super 2018

[2] Industry Super Australia

[3] Workplace Gender Equality Agency

[4] https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/Super-statistics/Super-accounts-data/Multiple-super-accounts-data/

[5] ABS Survey of Disability, Ageing and Carers, Australia, 2012

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All information provided in the magazine is sourced from independent writers & may contain general advice that is not endorsed by the FairVine Super Plan.