Women Must Work For 15 Years Longer Than Men. Here’s Why

After moving to Brisbane at the age of 16 and marrying her boss at 17, Larke Riemer, the Director of Women’s Markets at Westpac, found herself pregnant and helping her husband run his hotel. The pair worked their way up through the industry but received just one salary – in his name – none of which she was entitled to once they separated 15 years later.

With no assets, little money and no concrete plan, Larke moved with her two daughters to Townsville where she worked as Westpac’s first female sales representative. After some time, she and her husband reunited and bought a pub together, Larke investing and later loosing every last dollar to her name after the venture failed.

Larke often talks to women about how her business with her ex-husband failed, in part because she allowed him to have complete control over the finances. She talks about her divorce and its negative financial impact on her – and importantly how she took control of her life and finances to come out on top. This particularly applicable to Larke’s superannuation as upon her return to Westpac, she had no super and no savings. At this stage in her career, she set about building a her own plan that would allow her to retire with a very healthy nest-egg to live off during her retirement.

According to the new Westpac’s Retirement Readiness Report, women still have a way to go when it comes to financial security during their retirement with almost nine in ten Australian women worried about maintaining their standard of living during retirement. Larke believes that education is the key to reversing this trend.

The alarming report shows women may need to work 15 years longer to retire with the same amount of superannuation as men and proves why women need to address their personal finances rather than sit back and do nothing.

Other key findings in the report include:

• $145,000 gap between median superannuation account balance for women and men, aged 60 to 64, in Australia
• 84% of Australian women surveyed do not feel adequately prepared for retirement
• Almost nine in ten Australian women (89%) are worried about maintaining their standard of living during retirement

“Being prepared for retirement could not be more important, yet it is something that too many of us ignore until it’s too late. Many women face unique issues when it comes to saving for retirement. Women are often the primary carers for children as well as aging parents, receive less pay than men and frequently work in a part-time capacity. As a result, it is important for women to start preparing for life beyond work as soon as they enter the workforce. Retirement planning doesn’t need to be daunting and women can take small steps, starting from when they enter the workforce to ensure they are on track for a comfortable retirement,” said Westpac’s Director of Women’s Market Larke Riemer.

Alarmingly, 84% of Australian women surveyed do not feel adequately prepared for retirement, with a further 23% saying that they were not prepared at all. Although many plan to travel (64.7%), relax (71.6%) and spend more time with family (56%) in their retirement, almost nine in ten (89%) are worried about having sufficient funds to maintain their standard of living.

Further, the report found that two in five (39.1%) women surveyed don’t seek advice from anyone about financing their retirement. For those who do seek advice, a partner or family member is the most common source to speak with, with 34% of respondents indicating that their advice is sourced via these personal relationships. This trend is particularly common for young women with 45% of those aged between 18 – 29 looking to family members and partners for financial guidance.

Ms Riemer said, “What this research is showing us is that women are not seeking sufficient expert advice early on in their working life about their retirement which can help them set clear goals.

“Women could consider tactics such as paying off debt before retirement and trying to build wealth throughout their working lives. Making additional voluntary superannuation contributions consistently early in their careers, small or large, and taking advantage of possible tax incentives could really make a difference to the end result. Also, have a plan and stay engaged by setting concrete goals – this should mitigate any surprises down the track.

“People are living longer and naturally they want to be able to enjoy their retirement. It has been recommended that women and men should aim to build a retirement income that is 65% of their working income. Dedicating some time and consideration to preparing for retirement now can put you in a far more comfortable position for the future,” concluded Ms Riemer.

Retirement Tips for Australian Women

1. Identify the best ways to build wealth

Build a portfolio of good assets that support your financial goals. As you get closer to retirement, you can consider increasing your contributions to your superannuation.

2. Be clear on your retirement goals

It’s important to understand what you want out of retirement and how to plan accordingly. Different desired outcomes require different amounts of money however you should aim to retire your debt before you retire.

3. Explore tax benefits

There are considerable tax benefits to contributing more to your superannuation, so this is something that should be explored and considered in your planning.

What do you do to ensure a comfortable retirement? Join the discussion below…