By AMY STOCKWELL.
Remember this school-yard ditty?
“…First comes love, then comes marriage, then comes an excellent opportunity to think about superannuation before you have any children.”
No? OK, so it isn’t catchy, but it would be worthwhile if we could all chant this: if you’re going to have a baby, it’s a good time to think about your superannuation.
We’ve spoken over the past few weeks about the fact that many women are retiring with half the superannuation of men.
This is especially the case for women with children. In fact, new research from the Australia Institute has shown that over a lifetime, women with children earn 43% less than women without children – and they end up with less superannuation.
Just as an FYI, you should know that this post is sponsored by Australian Super. But all opinions expressed by the author are 100% authentic ad written in their own words.
But here’s the twist.
Men with children earn 25% more than men without children.
That’s right. Children actually boost men’s financial earnings over their lifetime.
Women with children earn less. Men with children earn more. It’s a funny ole world, right? A funny, inequitable, infuriating world…
As frustrating as this is, I’m going to suggest that this creates an opportunity to start a conversation about you and your partner’s superannuation – before one of you takes time away from paid work to raise kids.
Did you know that one partner can make contributions to their partner’s superannuation (with potential tax benefits)?
It’s true. So, if you’re going to go on parental leave or work part time to raise children and you have a partner, you should consider whether your partner could contribute to your superannuation for the period that you are not working full time, so that your superannuation doesn’t fall behind. There is a potential tax benefit for this arrangement – the contributing partner could claim an 18% tax offset on up to $3,000 worth of contributions.
Of course, you don’t need to rely on a partner to make superannuation contributions on your behalf. If you’re planning to have a child at some point, you could start boosting your super contributions now. Alternatively, if you’ve already had some time off and you’re heading back to work, it’s also a good time to increase your superannuation contributions to compensate for the time that you’ve been away from paid work.