MORE than one fifth of Australian women who own their own small business are not a member of any superannuation fund, a report says.
Research commissioned by Westpac also revealed the low take up and continuation of superannuation by female small business owners, with 53 per cent not sorting out a plan for retirement.
Most small businesses are required to pay at least the minimum 9 per cent amount of the earnings base to employees for superannuation, but are not required to make any sort of payment towards their own super.
"We're all going to need a lot more money because we're living longer. We need to fund that period of time and the pension is not going to be able to give us the things we want," said Larke Riemer, director of women's markets at Westpac.
The Association of Superannuation Funds of Australia recommends that to retire comfortably single women need just more than $40,000 a year, and for couples around $55,000 per year.
The government offers significant tax breaks for business owners who contribute towards their superannuation.
A full tax deduction for all pre-tax contributions is available up to $25,000.
For business owners over 50, this deduction is up to $50,000 until the end of this financial year.
This incentive of keeping tax payments lower and increasing the amount of money small business owners will have for retirement is something that needs to be taken advantage of more, especially by women who have significantly less super than men, Ms Riemer said.
"The amount of super women have in their super fund for retirement is about half that of men, some with very small amounts. The average female's super fund sits at $150,000 and in some cases it's much lower than that," she said.
While there are more men who are running their own business, women are catching up, starting a small business at twice the rate of men. In NSW women make up about one-third of the 650,000 small businesses in the state, according to the NSW Department of Trade and Investment.
"More woman than ever are leaving the corporate world, for whatever reason - to have children, flexibility or they just feel like having more control of their lives, so they are starting up these businesses but they are not thinking about their superannuation," Ms Riemer said.
In many cases small business owners believed their business was their superannuation.
"They'll build these amazing profitable businesses and then once they retire they'll be OK and in a lot of cases they don't have a succession plan in place," she said. "In some instances they walk away from the business altogether."
With the research stating 42 per cent of respondents wished they had managed their super differently, Ms Riemer recommended small business owners start planning early.
"You cannot not put yourself first - you still need to think about yourself, your assets and your family," she said.
Frequently Asked Questions about this Article…
Why do many female small business owners in Australia not have a superannuation fund membership?
Westpac research cited in the article finds more than one‑fifth of women who own their own small business are not a member of any superannuation fund. The article explains that while small businesses must generally pay the minimum 9% super guarantee for employees, owners are not required to pay into their own super, and many entrepreneurs assume their business itself will replace formal retirement savings.
How common is it for female small business owners to not have a retirement plan?
The article reports that 53% of female small business owners had not sorted out a plan for retirement, and 42% of survey respondents said they wished they'd managed their superannuation differently—indicating lack of planning is widespread.
How much income does the Association of Superannuation Funds of Australia say women need to retire comfortably?
According to the Association of Superannuation Funds of Australia quoted in the article, single women need just more than $40,000 a year to retire comfortably, and couples need around $55,000 a year.
What tax incentives are available for small business owners who contribute to their superannuation?
The article says the government offers tax breaks for business owners who contribute to superannuation: a full tax deduction for pre‑tax contributions is available up to $25,000. For business owners over 50, that deduction is up to $50,000 until the end of the current financial year referenced in the article.
How does the average female super balance compare with men’s balances?
The article states women’s super balances are roughly half those of men on average, with the average female super fund balance around $150,000 and in some cases much lower.
Are more women starting small businesses, and what impact could that have on retirement savings?
Yes — the article notes women are starting small businesses at twice the rate of men and, in NSW, make up about one‑third of the state’s 650,000 small businesses. Westpac’s director of women’s markets warns many of these new business owners aren’t thinking about their superannuation, which could leave them underprepared for retirement unless they plan.
Why is having a succession plan important if you view your business as your superannuation?
The article explains many small business owners see the business as their retirement nest egg but often don’t have a succession plan. Without one, owners risk walking away from the business and losing the retirement value they expected to rely on.
What practical steps does the article recommend female small business owners take about superannuation?
Based on Westpac’s research and commentary in the article, the recommended steps are to start planning early, prioritise your own retirement savings, consider making super contributions (including taking advantage of available tax deductions), and think about succession and how the business fits into your long‑term financial and family plans.
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