What is a pink recession?

February 1 |  4 min

How to mitigate fallout from a financial crisis

On a global level, COVID-19 has had a profound impact on the economy and has fundamentally changed how we operate at work and at home. When global catastrophes like a pandemic hit, the fallout can cause a global financial crisis which is felt for many years after the pandemic has subsided. The consequences can have a lasting influence on your super, and in some cases woman’s super in particular, which already faces many challenges.

The role of gender during a crisis

Even without a crisis hindering women’s savings, the amount women retire with is on average less than men’s retirement savings. Women typically retire with 47% less super than men in Australia1 and this impacts their financial independence in retirement. Add the fact that women tend to live longer and therefore need more in retirement means that we see many single women over 60 living in poverty. The Mercy Foundation found there was a 31% jump in homelessness among older women in 5 years2.

There are many factors that contribute to this inequality. Despite wage laws modernising and attitudes changing, women as a whole still get paid less. Their career is often interrupted by maternity leave and time off to raise children and it’s more often than not that women are the ones that take time off to care for elderly parents. So, In the event of a financial crisis hitting, and if women are unable to work, the resulting financial consequences can be crippling.

Example

An average 30 years old woman who has an annual salary of $50,000. If she was to stop working for 6 years, her time out of the work force would mean her retirement balance would be $77,000 less at retirement3.

What can you do?

Here are a few options to consider.

  • Consolidate your super accounts
    Having all of your super in one account means you save money by only paying one set of fees, have to deal with only paperwork from one super fund, and you can keep track of your super balance more easily. Before you consolidate, consider the effect a transfer may have on your benefits, such insurance cover. Make sure your employer is paying into your chosen super fund, call us – we can help make this as easy as possible!
  • Voluntary personal contributions
    Not everyone may have a spouse, and not everyone finds it easy to make contributions from their accounts. Thankfully, the government have introduced legislation in 2018 to allow people with a balance of less than $500,000 to contribute more than the cap in future years. Any unused contributions from previous years can be rolled forward for up to 5 years, allowing you to add more when you’re ready.
  • Spouse contributions
    If you’ve lost your job, had to take time off to help your kids with their at-home learning, or you’ve been taking care of an elderly parent, there is an option for your spouse (if you have one) to make contributions to your account. Your spouse can make these contributions regardless of what you earn, but if you’re on a low income, they can get a tax rebate of up to $540. You can find out more about the spouse contribution rebate here.
  • Contribution splitting
    Depending on your situation, having your spouse split up to 85% of their super contributions (both from their employer and their personal contributions) with you might also be good way to grow your super. If you’re a Vision Super member and would like to learn more about splitting super contributions with your spouse, give us a call on 1300 300 820.

Don’t forget Vision Super is there to help

The last global financial crisis in 2008 hit men hard, but this one looks like it’s going to affect women, so if you need to, consider getting financial advice from a professional. A financial planner can help work out the right strategy for you. And depending on the level of advice it may be at no cost strategies.

If you’d like more information about Vision Super financial planning, head to www.visionsuper.com.au/advice 

 

1 https://www.womeninsuper.com.au/content/the-facts-about-women-and-super/gjumzs
2 https://www.mercyfoundation.com.au/wp-content/uploads/2018/08/Retiring-into-Poverty-National-Plan-for-Change-Increasing-Housing-Security-for-Older-Women-23-August-2018.pdf
3 https://clarety-wis.s3.amazonaws.com/userimages/Resources/wiswomensuperthefactsweb.pdf

February 1 |  4 min

Must Reads

Feature, Fund news, Investments, must read  |  8 min read

US Inflation

It has been over a year since COVID-19 ended one of the longest equity bull markets in US history. Governments and central banks responded quickly and, as a result, global equity markets have not only recovered but some have hit record highs.

Feature, Fund news, Investments, must read  |  2 min read

Investment update March 2021

Auction clearance rates have recently reached elevated levels and this has coincided with very strong growth in house prices across Australian capital cities.

Feature, Fund news, Investments, must read  |  2 min read

Investment update October 2020

The global pandemic has created heightened levels of concern around asset valuations, especially for infrastructure and property assets.

Feature, Fund news, Investments, must read  |  3 min read

Investment update Sept 2020

September saw positive returns as investors continue to adjust to the ‘new normal’ of the Covid-19 affected world.

Build a better future for you and your family

Invest in your future self

Sustainable products, quality advice, education and of course, low fees.

You have options when it comes to saving in your super and drawing from it on retirement. Find out which of our retirement products is most suited to you.

The Latest

General  |  

Vision Super welcomes Lisa Darmanin as new Chair

Vision Super media release - Industry super fund Vision Super welcomed a new Chair, Lisa Darmanin, at the start of the new financial year.

Feature, General, Investments  |  4 min

Investment update June – US inflation

The Australian labour market has been significantly affected by COVID-19 and the subsequent policies that have been used to help businesses and households.

Feature, General, Investments  |  4 min

Investment update April – Labour market recovery

The Australian labour market has been significantly affected by COVID-19 and the subsequent policies that have been used to help businesses and households.

Already a Vision Super member?

The great news is you can now open your pension account online through the secure site.

Not a Vision Super member?

You’ll just need to open a Vision Personal account first and then you can transfer across to a Vision Super pension.