Published on July 7, 2016 12:37 pm, by Jen Bakker
The gender gap in Superannuation between men and women persists. It makes sense when women are generally the ones to take time off to care for babies and young children. In March 2016 the Australian Senate noted the Superannuation gender gap at retirement as being 46.6%.
Did you know that having a 5-year career break on an average wage in your 30s will mean a superannuation balance of $80,000 less in todays dollars in retirement (Source: The Association of Superannuation Funds of Australia 2015)? Given this, it’s important that everybody, in particular, women, are aware of the ways they can boost their superannuation in the years up to retirement.
Here are 5 ways to ensure you are doing all you can to boost your balance:
Make use of the government co-contribution
When you earn less than the threshold, make a personal contribution to your superannuation fund. The government will make a co-contribution of up to $500.
You may be eligible if you work a part year before or after having a break, or even when you go back to work part-time or full-time. To be eligible for the co-contribution you must have earned an income from employment for part of the year.
Make additional contributions
When you are back at work, consider salary sacrificing an additional percentage to increase your balance. If you are in a high marginal tax bracket, the additional 2-3% may not seem to make too much of a difference to your take home pay. Alternatively, you could consider making personal contributions (after tax). Upon receipt of a bonus or tax refund could be the perfect time to do this.
Consolidate your superannuation funds and make sure you are not paying multiple fees
New jobs can mean new superannuation funds. If you have changed jobs and not combined funds you may have a lost superannuation account. At the end of 2015 there were over six million lost and ATO-held superannuation accounts with a combined balance of over $16 billion. Finding lost super is as easy as checking online.
Make your superannuation visible
It’s easy to forget about superannuation with so many other things to remember. One really easy way to remember is to have it visible. At MoneyBrilliant we offer the ability to link all your accounts, including your superannuation. Just seeing your superannuation balance when you are looking at other account balances may encourage you to think of ways to increase it during the year.
Ask your spouse to make a contribution
If you are part of a couple and one of you is staying home for a reason related to your family circumstances, it can be the perfect time for the working partner to make a spouse contribution. The person making the contribution may be eligible for a tax offset.
Jen is an experienced banking professional who loves wine, coffee, finding a bargain and of course her three beautiful children. Since Jen's first budget led her to buy a home at 20, Jen has passionately helped others to make better decisions with their money.