ONE WAY TO SUPER DOOPER YOUR LIFE
Most people I know simply don’t want to believe that there is a gender pay gap. I include my young adult children in that category. Although it doesn’t seem to matter whose calculations or methods we use, gender pay gap is real and it’s impact is becoming greater as our society ages, whether you choose to believe it or not , those are the facts! Many think that the gender pay gap which is sitting at 15.3% includes part time work, but it does not. The Workplace Gender Equality Agency only base their calculations on full time positions. They do not compare like for like jobs; so they are able to give an overall measure of women’s paid work positions, compared to men. (Carla Harris Women’s Agenda October, 2017)
But the reality is that it is not until people are middle aged and start to think more seriously about their super, that they will see clearly how much men retire with, and how much women have in comparison. In my experience it is usually close to half. It all comes down to how much you are earning, as your employer must pay at least 9.5% of your income into your super. Therefore if you are paid less, your super has less money in it and that means less money to invest and hence smaller growth. Having 15.3% more money each week, adds up quite quickly, year after year.
Women are also more likely to take time out of the workforce for maternity leave to have babies, as well as to engage in part time work, once the family is started. If the men are earning more, then logically the Dad’s income is more beneficial to preserve, in order to pay the bills, while Mum is looking after the children. With the very high cost of childcare, it is often realised that if Mum was to return to work, that the family would not be significantly financially better off and the stress of juggling work and family would be very high. This may in fact be a big contributing factor to the high rate of divorce.
As people are living longer, there is the added issue of “the sandwich generation”. On one side they have their children staying at home longer and being dependant on the family, but they also have their parents living longer and requiring assistance, which tends to fall on the women’s shoulders. Our caring nature and societal expectations, means that daughters are more often needed to help elderly parents and parents-in-law with every day assistance, such as driving them to appointments, shopping, cleaning and even cooking.
I have a friend who is a high school teacher, who once into her 50’s decided to go from full time to casual teaching. However her ability to work hinges around her Mother-in-Law’s needs, as she is in her 90’s and has health issues, but refuses to go from her unit into a retirement home where she could be assisted. My friend who is a good women and a kind person, does what is needed to help as required. But the reality is that once again her ability to earn is restricted and hence her capacity to build her super is also.
Sadly, what happens to many women in this age group, is that this is also the time when divorces happen, and a women is left with only a small amount of superannuation to retire on. After a divorce, everything you have worked all your life together for is divided, and for a women it is very difficult to ever regain the security they once had. Only today the government announced that they are paying $300,000 every minute on welfare in Australia. Finding a job when you get older also becomes quite a difficult thing to do, let alone a high paying one, regardless of your qualifications or experience.
However, for many women either divorced or widowed, their meagre super usually runs out after the first 2-3 years of retirement, and then they have little option but to go onto the pension. In reality they have worked tirelessly for society, predominately in unpaid work for the people in their families who make up the working community. When they did work they were paid less, just because they were women in a world where men make most of the rules, based on their needs, turning a profit and out of sheer ignorance. This is an area that the government needs to look at in order to reduce the number of women requiring the pension, by making an employer or the government to continue to pay super for women while on maternity leave or during the pre-school period and to once and for all mandate equal pay for men and women! They need to look at the cause of the problem, if they ever hope to fix the welfare issue.
One thing women can do for themselves is to take control of their own super fund. We were told for years that only people with large super amounts (predominately men) should even be bothered to manage their own super fund, because of the high costs and need for regulatory compliance. However that was when you needed to pay an accountant large payments to set up the fund and manage book keeping and tax requirements of the fund for you. That is no longer the case, as for a yearly fee of $799 you can set up your own superfund online and have all of it done for you.
The benefits include that you now can decide what you choose to invest in, and know if it agrees with your researched knowledge and if you think it is ethical or that you want to give those companies your support. For instance most super funds support some of the biggest tobacco companies in the world with your hard earned money, all the while you are encouraging anyone you know who smokes to give up!
I know, because this year I did it myself. We can invest in shares, precious metals, property crowd funding for big property purchases that you may own a small share in, fine art investments, or whatever you think is a good investment according to your acquired information. Yes it means I have to show interest in the economy and read some financial reports that I subscribe to online, but I also know a lot more about my super and I don’t need to pay anyone fees for it to sit in my bank account (in fact I earn interest instead of paying fees if it does). Post divorce, when my children were still at school, I got a job which was supposed to be for 10 weeks, but went on for 10 months, before I finally realised that I could be earning a lot more doing other things. They had their own super fund, which I decided to keep; as it gave me security for my children as it had good death and disability benefits. However years later I was sent a notice that my fund no longer had any money in it, as it had all gone in fees!
It was a stark reality, that I had wasted almost an entire year of super payments for nothing! Yes I should have combined it with another of my larger super funds, but as my ex husband was no longer contributing to anything for his 3 children. While I was trying to provide for all of us, it seemed like a small bit of security for my kids if the worst was to happen to me, as I know their father would not be there to help them financially or otherwise. So if the economy or stock markets were to collapse one day like it has happened in the past, then my super will be safe in my bank account, in the investments of my choice, not in a superfund who under such circumstances would struggle to survive. I’m not saying this will necessarily happen, but I am saying that if it ever does, that’s one less thing I have to worry about.