By AMY STOCKWELL.

A recent study has shown that, on average, women have little more than half the superannuation of men at retirement age – which means that many Australian women could run the risk of a very basic lifestyle later in life.

That’s something you’ve probably heard before.

Now, we could get grim about it. We could panic about it. We could delude ourselves that isn’t relevant to us. We could hide under the doona and accept that a financially stressful retirement is inevitable.

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 and written in their own words.

Or we could do something about it.

Want to be a Superwoman? It’s not tricky. In fact, despite its reputation as being difficult and dull, very little about superannuation is impossibly complex. It’s easier than you think – and turning your mind to it will not only make your future more secure, it will also make you feel more organised and empowered.

Firstly, a quick run-through on why women are retiring with less in their superannuation accounts:

As a woman, you’re looking at a long life. A 20 year old woman today can expect to live to around 94* and retire at around age 76. This means that you could be living in retirement for about twenty years.

As a woman, you’re also more likely to be paid less than your male counterparts. On average, women are paid almost 20 cents in the dollar less than men (outrageous, but true). The superannuation contribution that your employer makes on your behalf is calculated as a percentage of your salary. In short, the less salary you earn, the less super goes into your account.

Finally, women often have disrupted work patterns – whether it is raising children, caring for elderly relatives, or working part-time – less time in the paid work force, means that your employer makes fewer superannuation contributions on your behalf. Less time in the workforce means less money in your super account – and it could be a lot less money by the time you reach retirement.

This is especially the case for women who are often the ones who take time away from paid work to raise children.

Example 1: let’s say that you and your bestie are both 25 years-old and both earn $60,000pa. If you both work continuously, you can expect your super to reach around $335,000. But if you decide to take a break from work, maybe three years to have children, and then you work part-time for the next 15 years, you’re looking at retiring with $93,000 less than your friend.**

That’s right – take time for child-rearing and you might find yourself less almost a hundred thousand dollars which is potentially going to have a big impact on your likelihood of a comfortable retirement.

So, what can you do about it? What steps should you take to make sure that you get the super that you need (and deserve!)?

The first step is to consider making additional contributions to your super.

It doesn’t need to be a big contribution – it may be so small that you don’t particularly notice it leaving your bank account. But, through the magic of compound interest, a little bit each week popped into your super account can have an unexpectedly large impact when you reach retirement.

Example 2: Let’s say you are 30 (I know I do – ha!). You’re earning $70,000pa decide to contribute an extra $25 per week to your super. By the time that you retire (at 65), you will have contributed an additional $45,500. That’s an amount of money that would give you a comfortable lifestyle for one year of your retirement.

BUT WAIT! There’s more! Because you have made these contributions over a long period and investment returns have been accruing on your super account over this time, that $45,500 contribution could actually transform into an extra $153,468 when you retire. Contribute an extra $25 a week; and you potentially end up with more than three times what you actually invested .

Here is the other cool thing: the career break and part-time work I described Example 1 resulted in $93,000 less super in retirement. The $25 per week additional contribution from age 30 in Example 2 resulted in $$153,468 more in super at retirement.

See what I did there?

It is possible that if you took 3 years off full time work in your 20s (as described Example 1), you could add $25 per week to your super from 30 and make up for the super contributions you missed out on while you weren’t working full time. What’s even better is that if you think you might want to take some time away from full-time work in the future (for child-rearing, caring, study or working overseas), you can start making additional small contributions in advance to reduce the likelihood of being disadvantaged.

Obviously, these are examples, and your circumstances may be different. But the principle will be the same: small contributions while working = bigger payoff in retirement.

1. Find out how much extra you should contribute to get the retirement savings that you want. AustralianSuper offers one of several online calculators that you can play with that will show you how much more super you will have if you pop in a little extra every week .

2. Contact your super fund (or go to their website) and fill out a form that tells your fund that you want to make additional contributions. It may vary between funds, but you should be able to pay your additional contributions by direct debit, BPAY, cheque (by mail or in person) or even arrange for your employer to make a direct payment out of your pay. For bonus organisation points, you can talk to your employer’s human resources department and find out whether it’s in your best interest to salary sacrifice superannuation contributions, which could mean you pay less tax. Win!

3. If you earn less than $46,920, you may be entitled to up to $500 tax free from the Australian Government (called a “co-contribution”) just for making these additional contributions to your own account. FREE MONEY! You can find a Factsheet from AustralianSuper here .

4. Sit back and feel smug, well-organised and confident that you’ve done something that will make a significant difference to your future.

Sources:

* “Women $1m Poorer In Retirement”, The Age, July 2013.
** Based on investment return of 6.5% after fees and taxes, CPI 2.5% and salary increase of 3.5%. Opening super balance of $5000, SG rate of 9.25%, includes ongoing fees of $1.50 per week and $4.14 per week for insurance.

The views expressed in this article are those of Mamma Mia and do not necessarily reflect those of AustralianSuper (AustralianSuper Pty Ltd ABN 94 006 457 987 AFSL 233788 the Trustee of AustralianSuper ABN 65 714 394 898). AustralianSuper does not accept responsibility or any liability arising from the content of this article, which is of a general nature and does not take into account your personal objectives, situation or needs. Before making a decision about your super consider your financial requirements and read any relevant Product Disclosure Statements. Investment returns are not guaranteed as all investments carry some risk. Past performance gives no indication of future returns.

AustralianSuper can make all the difference to your super savings.

One of Australia’s largest industry funds with more than 2 million members. AustralianSuper offers good long-term performance that can help you save more over the long term. 

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Do you contribute extra money to your super? If you don’t already, have you ever considered it?