A new report for the Super Members Council found single women and renters were amongst the older women most at risk of retirement poverty. (Source: Eamon Gallagher/Getty)
Australia is staring down the barrel of a “crisis” of older women entering retirement in poverty, as half of our population finishes work with significantly less superannuation. While having kids is a large contributor to the gender super gap, a new report has found common later-in-life events are “dramatically” eroding retirement savings.
Separation, unpaid caregiving for older relatives and family violence are significantly more likely to force women into early retirement or part-time work, the report by Impact Economics and Policy for the Super Members Council found. These life events could result in women having up to $95,000 less in superannuation.
Super Members Council CEO Misha Schubert said the report was a “wakeup call” for policymakers and called for a “bigger and bolder approach” to be taken.
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“Australia has made important strides in recent years on the gaps in pay, super and workforce participation, but this research shines a spotlight on the need for further bold reforms to ensure our retirement system truly works for women – especially low-income women,” she said.
“Without urgent action, generations of Australia’s lowest-paid women risk poverty in retirement.”
The report found women were nearly 1.5 times more likely than men to be forced into early retirement between the ages of 55 and 64, due to the health of a family member or inflexible work arrangements.
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One in seven women aged 45 to 65 faced primary caregiving demands, such as for a sick partner, a family member with a disability or an elderly parent. Women were three times more likely to have these demands than men.
A rising number of single older women are now renting, with the report finding nearly 60 per cent of older female renters already lived below the poverty line.
Women were found to be at greater risk of giving up home ownership after a separation or divorce. They then face a higher risk of falling into poverty if they don’t repartner.
Older single women had a higher chance of living in poverty, with more than two in five aged 80 or older living in poverty.
About a quarter of women aged 60 or older were found to be living in poverty, compared to 21 per cent of men.
The government has said it is committed to closing the gap by reforming superannuation and taxation systems.
From July 1, superannuation is now available on government paid parental leave. That means parents receive an extra 12 per cent contribution to their super fund.
The average super balance of men aged 60 to 64 was $395,852, according to the latest Australian Taxation Office statistics.
For women in the same age bracket, the median balance was $313,360. That represents an $82,492 gap.
To put that into perspective, the Association of Superannuation Funds of Australia (ASFA) says singles would need $595,000 in superannuation to achieve a comfortable retirement. Couples would need $690,000.
These figures are based on homeowners, with the retirement gap compounding if people are renters.
To fund just a modest retirement, single renters would need $340,000 in superannuation, and couples would need $385,000.
That’s more than triple the $100,000 needed for single and couple homeowners alike for a modest lifestyle.
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