Women Need to Make Most of Self Managed Superannuation
A recent study has shown that women on average have approximately $200,000 less in superannuation savings than men.
According to the study, the impact of maternity leave and part- time employment after women have children affects their career progression and earning capacity. But none of this is news.
What is interesting however, is the fact that women are not taking advantage of the benefits of self managed superannuation, despite having a longer life expectancy than men and hence needing more superannuation during retirement.
Fiona Reynolds of the Australian Institute of Superannuation Trustees chief executive comments on the typical superannuation behaviours of women during retirement “About 57 per cent have nothing left after a year”.
Reynolds also commented that ‘ the median superannuation balance of women currently in the workforce is just $27,200’.
Although the most obvious solution appears to be to contribute more than the required 9% of your salary into superannuation, the benefits of self managed super extend far beyond this.
One of the most effective ways of increasing your superannuation savings is to make the most of the superannuation contribution limits available to self managed super funds by Splitting your contributions with your spouse.
A spouse can salary sacrifice into their super fund and split this contribution between themselves and their partner. Women, who may be the lower income earner, therefore can benefit by contributing more to super and their spouse can take advantage of the tax deduction available.
Other types of contributions that can be split with a spouse include: Employer contributions and in some instances, personal contributions ( that you can claim a tax deduction for- this applies to self- employed people) .
A man can transfer up to 85% of his last years concessional contributions to his wife and vice versa.
Another benefit for women who aren’t working or who earn less than $10,800 a year, is that their husbands can receive a $540 tax rebate by making a contribution to superannuation of up to $3,000 on behalf of their wives. Men can make these contributions of up to$3000 every year!