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Narrowing the retirement savings gap for women

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Tips to help women avoid a potential shortfall in retirement savings.

Assumptions: This example is for illustrative purposes only. Amounts are shown in today’s dollars: the person starts working at age 22 and retires at 67. Initial salary $50,000 p.a., 1% salary increase p.a. Salary increases during the time off work. 9.5% p.a. of salary contributed to super. Retirement income is $47,000 p.a. The assumed fund average return is 4.5% p.a. When on leave for 10 years, no super is contributed. When working flexibly, salary is calculated at 60%, during ages 32-42. No Age Pension received. Insurance premiums haven't been taken into account, super taxes have. Other investments are not taken into account.*The life expectancy of a 67 year old woman today is 87 years. Source: Based on Australian Bureau of Statistics data, Life Tables, States, Territories and Australia, 2014-2016. 

Lower or no super contributions over the ten year period means there’s less capital to grow, and means the accumulated savings will then run out faster in retirement (unless spending is also reduced).

Today, many companies offer paid parental leave, on top of any Government payments. Some businesses also continue to contribute to super during periods of parental leave, which can have a big impact on balances over the longer-term. These types of incentives can be important to consider when assessing potential employers.

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