Women Less Prepared than Men Heading into Retirement
2 November 2015 at 9:17 am
Older working women have an average of $100,000 less in superannuation than their male counterparts, according to figures from one of Australia’s largest super funds.
The Journey Begins report by REST Industry Super found that the average older working woman has $171,101 in super while the average older working man has $275,646.
According to the superannuation giant, the gap has resulted in women being more likely than men to rely on the age pension to fund their retirement.
“Not only are older women more likely to make use of the age pension, they are more likely to solely rely or heavily rely on it to fund their retirement,” the report said.
The report also found that older women are less likely to know at what age they want to retire or should realistically expect to retire.
REST Industry CEO, Damian Hill, said that while the findings indicated that older working Australians were conscious of the need to plan for retirement, they also showed most are still expecting to rely on the Age Pension, equity in their home or government payments to support their retirement.
“Older working Australians are planning to work longer to provide themselves with the retirement they’d like to enjoy – respondents in this survey on average said they want to retire at 67 but expect to do so at 69,” Hill said.
“Part of the reason for this shortfall is that older working Australians – the baby-boomer generation – have only been accumulating meaningful superannuation since the compulsory guarantee levy was introduced in 1992, so don’t have the benefit of decades of savings to retire on.”
The survey found, inheritance was expected to be a key factor of retirement funding. Of the 31 per cent of respondents who expected to receive an inheritance, 90 per cent anticipated putting at least some this windfall toward funding their retirement.
At the same time, 32 per cent of people surveyed believed rising housing prices meant they would need to pass on any money they inherit to their children to help fund a deposit on a house.
For people who had received an inheritance the average windfall was $110,000, while those anticipating a future inheritance expected to receive on average around $250,000.
“What comes through clearly is the desire of people approaching retirement to ease the financial burdens their adult children face today, especially buying a house and covering school fees,” Hill said.
“That’s laudable but we would urge retirees not to forget that their retirement savings are first and foremost meant to fund their own retirement, and using retirement savings for other purposes may mean they become a financial burden on their own children later in life.”
Hill said debate around proposed changes to superannuation regulations had knocked the confidence of older Australians, with 86 per cent of respondents to the study concerned that government intervention in the sector would actually damage their retirement savings.
“To us, this reinforced the need for the purpose of superannuation to be enshrined in legislation, so we welcome the government’s adoption of the Murray Inquiry’s recommendation to do so,” he said.