Superannuation is the latest area of inequality between males and females with women often ending up to tens of thousands of dollars behind their male counterparts in retirement stakes.
The ATO is encouraging women to take an active interest in their superannuation to help overcome the retirement savings shortfall many are currently experiencing.
So why is there a shortfall? According to Megan Yong, a guest speaker at the Women’s Super Summit in Melbourne earlier in the month, “Women generally have time out of the workforce to have children or other caring responsibilities, or they’re more like to be working casually or less hours than men”.
On average, Australian women are currently retiring with super balances of just $112,600. This figure is much less than the amount of $40,000 per year that a single woman needs in retirement income.
Increasing your super balance can be as easy as putting the equivalent cost of one cup of coffee a day into your super, this can add up to an extra $128,000 when you retire.
The ATO have also released a 5-Step Check for women. This includes:
1. Check your super statements: Generally your superfund will send you a statement at the end of the financial year. It’s important to check this statement to ensure that your employer is paying the correct amount of super on your behalf. If you believe you are not being paid correctly, the ATO can help you investigate this.
2. Make sure your fund has your TFN: If your fund has your Tax File Number (TFN), it will make it easier when you log on to ATO online services to keep track of and transfer your super and to find any lost super or super the ATO holds on your behalf. This can be achieved by looking at your super statement to see if your TFN is listed on it. By providing your TFN; your fund will pay less tax on employer contributions, you are less likely to lose track of a super account, you will not miss out on government super payments and you will be able to make personal contributions to the fund.
3. Consider government contributions:If you’re a low or middle-income earner, the government may help you boost your savings through the super co-contribution. This is a government payment you may get if you make personal super contributions into a complying super fund account. For 2013-14, the maximum income limit is $48,516. To receive the maximum co-contribution ($500), you need to earn $33,516 or less and put $1,000 into your super account during the financial year.
4. Put extra into your super: You can make payments into your super fund account over and above the 9.25% your employer pays on your behalf. This can help you build your super over time.
Another way of controlling your super and more importantly investments in super is to start your own Self-Managed Superannuation Fund (SMSF). This is a tricky area and we encourage clients to get the proper advice to see if a SMSF would suit your needs.
For more information and or help with your superannuation, please don’t hesitate to get in touch with the team here at Fortis Accounting Partners. You can reach us on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
