Pension looms large for a generation of working women

WITH just $39,700 in superannuation socked away after more than 40 years in the workforce, Kerrie Eather is typical of a generation of women who are desperately trying to accumulate more super before they retire.

By InvestSMART · 10 May 2012

By InvestSMART ·
10 May 2012

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Until Mrs Eather was laid off following an accident this year, she had been making weekly contributions of $50 to her superannuation.

At that rate, she calculated she would have about $60,000 when she retired. Even then, she knew she would have to keep working during retirement, realising life on the pension would not allow for weekends away or holidays.

Mrs Eather, 59, is reluctant to criticise the Gillard government's decision to cap super top-ups by the over-50s to $25,000, instead of the $50,000 it had promised. But she says superannuation for women like her is a "joke" and she is frustrated the government is not doing more to help workers reduce their reliance on the pension.

According to the Association of Superannuation Funds of Australia, the average superannuation of a woman of Mrs Eather's age is $90,783, while the average man has $112,632. Yet 60 per cent of women aged 65 to 69 have none.

Before her husband died last year, Mrs Eather would have never considered herself to be one of the working poor. Now, she does.

"I am typical of the women I know," she said.

"Most of my friends are widows or women in their early 60s who have had children, taken time out and really don't have much super. They are the working poor."

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Frequently Asked Questions about this Article…

How much superannuation does the article say some older women have saved?

The article highlights that some older women have very low super balances. It gives the example of Kerrie Eather with $39,700 after more than 40 years in the workforce, notes the average super for a woman of her age is $90,783 (versus $112,632 for men), and reports 60% of women aged 65 to 69 have no superannuation at all.

What was Kerrie Eather contributing to her super and what did that mean for her retirement savings?

Mrs Eather had been making weekly contributions of $50. At that rate she calculated she would finish with about $60,000 in super, which she said would be insufficient and mean she would likely need to keep working in retirement rather than living comfortably on the pension.

Why does the article say many women are worried about relying on the pension?

The article explains women are worried because many have low or no superannuation—often due to time out for child care or widowhood—and therefore would be heavily dependent on the Age Pension. That reliance makes it hard to afford extras like holidays and can leave women classed as the 'working poor.'

What does the article report about the government decision on super top-ups for people over 50?

The article says the Gillard government capped super top-ups by over-50s at $25,000 rather than the $50,000 it had originally promised. Mrs Eather is reluctant to strongly criticise the decision but is frustrated the government is not doing more to reduce reliance on the pension.

How does taking time out of the workforce affect women's superannuation, according to the article?

According to the article, taking time out to raise children or other caregiving roles can lead to much lower super balances. Many women who took time out—plus some widows—end up with little super and face financial pressure in later life.

Does the article suggest older women will continue working during retirement?

Yes. Using Mrs Eather as an example, the article suggests that because her projected super is small (about $60,000 at her contribution rate), she expects to keep working during retirement because the pension alone would not allow for extras like weekend trips or holidays.

What key statistics from the Association of Superannuation Funds of Australia are cited in the article?

The article cites statistics from the Association of Superannuation Funds of Australia showing the average superannuation of a woman of Mrs Eather's age is $90,783 while the average man has $112,632, and that 60% of women aged 65 to 69 have no superannuation.

Who is the personal example used in the article and what does her story illustrate about retirement savings?

The article uses 59‑year‑old Kerrie Eather as a personal example: after more than 40 years in the workforce she has $39,700 in super, was contributing $50 a week, was laid off after an accident, and lost her husband the prior year. Her situation illustrates how modest savings, life events and limited policy support can leave many women at risk of poverty in retirement.