As women around the world celebrated International Women’s Day this month, there is a unique opportunity for Australian women to make their own bold change for the better and set themselves up financially for retirement.
Wide-ranging rule changes to super in Australia are on their way, and these will affect many Australians of various ages saving for their retirement.
We still hear a lot of talk about the gender pay gap being alive and well, with women’s average full-time total remuneration across all industries and occupations 23.1 per cent, or $26,853, less than men.
However, what’s perhaps more alarming is the gender disparity with superannuation, where Australian women retire with almost half the amount of super than men and one in three women retire with no super savings at all.
This year’s catchphrase for International Women’s Day on March 8, Be Bold for Change, is a great stimulus for women to get a move on with their super and find out if they will be impacted by the new rule changes which will apply from July 1.
You really can’t afford to miss this window of opportunity over the next few months and take superannuation matters into your own hands. By engaging with your finances and seeking professional financial advice, you can be your own ‘super woman’ and very quickly be on the road to achieving financial independence and accelerate gender parity with your super balance.
The key super changes
From July 1, the after-tax (non-concessional) contributions cap will drop from $180.000 to $100,000 per year. These contributions can be made using money received from an inheritance, a redundancy payout, the sale of shares or property and money from savings.
Providing you are under the age of 65, you have a last-minute opportunity to bring forward three years’ worth of after-tax contributions in to super – that means up to $540,000 individually or up to $1.08 million per couple. After July 1 this year the new rules mean you will only have the ability to bring forward a maximum of $300,000 each.
If your super balance is more than $1.6 million, you will not be able to make after-tax contributions at all after July 1 and lower contribution limits apply for those close to this balance.
If you are working and salary sacrificing into super, it’s also important to know the cap for concessional contributions (pre-tax contributions) also will be lowered from July 1 from the higher $35,000 limit (for over 50s) to $25,000 regardless of your age, which will include the 9.5 per cent compulsory super paid by your employer.
What’s important to remember is that these changes are far reaching so seeking the right financial advice and acting before July 1 is crucial.
By empowering yourself financially, you really can make a bold change to your financial situation which ultimately could determine when you can retire and the lifestyle you can lead after your working years.
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.
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