Saving for retirement keeps women awake at night

14 October 2013

Australians are worried about having insufficient funds for retirement, according to the inaugural MLC Australian Wealth Sentiment Survey.

The MLC Australian Wealth Sentiment Survey takes a pulse check of how Australians are feeling about their wealth.

The survey found Australians remain very cautious on the outlook for the economic environment and are focused on deposits and paying off debt. Meanwhile, consumer appetite for risk will increase marginally over the coming months – with a growing desire to put more into property and shares.

It also found Australians are very concerned about saving for their retirement – especially women.

Key superannuation findings:

• When asked to rate their current concerns about risks in super and investments on a scale of one to 10 (low to high concern), at an average 7.02, women are the most concerned about inadequate savings in retirement (compared to males at 6.74).

• Looking more closely by age, females aged 50+ were the most concerned (at 7.21), compared to their male counterparts of the same age (6.22).

• Males are typically more concerned about missing investment opportunities.

• Those within 5 years of retirement tend to invest more conservatively for income than growth. However, females aged over 50 are more than 60 per cent more likely to nominate this strategy than their male counterparts (9.92 per cent to 6.06 per cent).

“With people living longer, having extended retirements and being much more active in their retirement, the harsh reality is most people won’t have enough savings to fund their retirement,” NAB Wealth Group Executive and MLC CEO Andrew Hagger said.

“For women this especially rings true, as women retire with 40 per cent less super than men because they take time out for children, are more likely to work part time and typically earn less than men.1

“While it’s not surprising to us that women are worried about funding their retirement the survey is a timely reminder to women about how they can start to bridge the gap by adopting some key savings strategies.”

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Emily Ritchie

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1 ASFA, SuperStats, Feb, 2013

MLC Quarterly Australian Wealth Sentiment Survey (PDF, 205KB)

About the survey

The survey assesses the investment environment by asking Australians about their current financial situation, investment intentions, their level of concern related to super and other investments, insurance cover and proximity to retirement.

More than 2,000 respondents participated in the survey, with weights applied to age, location and gender to ensure the results reasonably reflect the Australian population. The survey was conducted over a 19-day period from 9 August to 27 August.

Strategies for women saving for retirement

Consolidate your super: Consider merging your super into one fund if you have two or more due to changing work patterns or multiple employers. Consolidating your super can help you save on fees and take greater control of your retirement savings. To reclaim lost super and consolidate multiple accounts you may want to visit

Maximise pre-tax contributions during higher income periods: Think about making additional contributions from your pre-tax salary or business income before and after any work breaks or periods of part-time employment. These contributions are taxed at a maximum rate of 15 per cent, not your marginal rate. So they are more tax-effective when your income is higher. You may be surprised at how little it takes to make up for your time out of the workforce as the case study below illustrates.

Consider other strategies during lower income periods: If you earn less than $48,517 pa and at least 10 per cent comes from an employer or business activities, you may be eligible for a Government co-contribution if you make personal after-tax super contributions. To receive the maximum co-contribution of $500 a year, you will need to contribute $1,000 and earn less than $33,517. Additionally, while you are not working or during periods when you earn less than $13,800 pa, your spouse may want to contribute into your super account. By doing this, you could grow your super and your spouse could be eligible for a tax offset of up to $540.

Case study

Sally and Sue are 30 years of age and earn a salary of $80,000 pa, plus superannuation guarantee contributions from their employer. They both already have $50,000 in super and would like to retire at 60.

While Sally doesn’t plan to have children, Sue does and expects to take five full years out of the workforce between 35 and 40.

It’s estimated Sally and Sue will have $515,000 and $430,000 in super respectively (in today’s dollars) if they rely solely on the super their employers provide and don’t make additional contributions.

But Sue wants to make sure she doesn’t compromise her retirement lifestyle, so she arranges to contribute an additional $3,000 pa of her pre-tax salary into super in the years she is working. That’s the equivalent of only $5.50 per day in after-tax salary, not much more than a cup of coffee.

By doing this, it’s estimated Sue will also retire with $515,000 in super in today’s dollars at age 60.

Important information: The strategies and case study provided in this media release were prepared by MLC Limited (ABN 90 000 000 402), 105–153 Miller Street, North Sydney, NSW, 2060. It is intended to provide general information only and does not take into account any particular person’s objectives, needs or financial situation. Before making a decision regarding the acquisition or disposal of a financial product, persons should assess whether the advice is appropriate to their objectives, needs or financial situation. No responsibility is taken for persons acting on the information provided. The information is based on our interpretation of relevant superannuation and taxation laws as at 10 October 2013. Because these laws are complex and change frequently, you should obtain advice specific to your own personal circumstances, financial needs and investment objectives, before you decide to implement any of these strategies. MLC is not a registered tax agent. If you wish to rely on the general tax information contained in this press release to determine your personal tax obligations, we recommend that you seek professional advice from a registered tax agent. The investment returns in the case study are hypothetical examples. They do not reflect historical or future returns of any specific financial products.