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If you’re a stay-at-home mum one thing you shouldn’t put on hold is planning for your retirement, even if you’re not currently in paid work.
According to the latest AMP.NATSEM Income and Wealth Report, Child Care Affordability in Australia, women are still taking on the bulk of child rearing responsibilities.
The report showed that only 29 per cent of mothers with kids under five in child care work full-time, with around 42 per cent working part-time. This figure is even less (26 per cent) for families with children not in any formal care.
The report’s findings are undoubtedly a contributing factor to why women’s superannuation balances are lagging behind men’s. The unfortunate truth is many Australian women are reaching retirement age without enough super to live the lifestyle they had hoped for, forcing them to keep working or make ends meet with the age pension.
However, even when mums are not working full time, there are some simple strategies to help them boost their super savings.
Small contributions go a long way
The first step to making sure retirement savings stay on track is to find room in the family budget for even the smallest regular contribution into super. This can make a significant difference to super balances in the long term thanks to the power of compound interest.
Start spouse contributions
This is a worthwhile strategy for those women that earn less than their spouse to build their retirement savings together. The spouse can make contributions to their partner’s super on their behalf and receive an 18 per cent tax offset (up to $540).
Take advantage of co-contribution
Anyone earning less than $33,516 a year who makes a contribution to their super fund is eligible to get a tax-free cash boost of up to $500 into super through the Federal Government’s co-contribution scheme.
Wise up financially
Get your super statements out and look at how much you have in your super account and, importantly, how it is invested. Consider your options and whether you can afford to tick the box for a more growth-oriented investment strategy. Contact your super fund to find out about your asset allocation or speak to a qualified financial planner.
Consolidate super
On average Australians have 3.5 super accounts each. Consolidating multiple super funds into a single account will keep fees to a minimum and mean more of your money is working for you.
Mohamed Said is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.
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