by Peter Switzer
Elizabeth Broderick, who is the country’s Sex Discrimination Commissioner, has slammed the nation’s superannuation system because it’s biased towards people who work for 35 years.
The end result shows two depressing facts, though she only cites one. She shows the sad reality that in 2006 the super balance for a woman 45 to 49 years of age was a paltry $8,000.
The second depressing fact was that men’s balance was only $31,000 after 35 years of work!
Of course, the female situation is worst but both balances are terrible and it reflects how detached we are to our future and what we have to do to make sure we have a decent retired life.
Financial education failure
This is a failure of financial education. Governments have wasted money on things like financial literacy programs but you never hear anything about them. There is no public engagement with the issues that simply say if people ignore their future finances, they will end up in the poor house, and women need the most education.
The irony is that women are much better money managers — most mothers assume the role of Treasurer Wayne Swan in the family.
Surveys are shown that women are better at investing and reacting professionally to money guidance from experts, reading books and going to money websites such as switzer.com.au.
Behind the eight ball
Women are behind the eight ball because of a few important reasons.
The Sydney Morning Herald on 15 September showed that the difference between men and women’s ordinary full-time earnings is 17 per cent. Secondly, the compulsory super system is based on nine per cent of your pay going into super for around 35 years but if women lose 10 to 20 years out of the workforce for family caring reasons, they fall behind.
Super is a compound interest thing and the more you get into super early, the more you have rolling over like a snowball getting bigger. Women having children can be out of the income-earning game at a critically crucial time.
And finally, if women encounter a divorce this can also play havoc with future super balances.
Pie in the sky
Broderick is looking at solutions such as a national social insurance scheme and rewards for unpaid caring work performed by many women, but this is pie in the sky stuff at the moment. And anyway, government handouts are seldom all that exciting.
While it would be nice to think one day governments could afford this, I would prefer women to do a Peter Finch from the movie Network, where he uttered the famous line: “I’m as mad as hell and I’m not going to take it anymore!”
GST your life
Young women need to get really money smart. They need to look at how they spend their money and cut back by 10 per cent. I call it GST’ing their life!
Take the money and put it into super, buy some great blue chip shares that pay healthy dividends or even buy an investment apartment using tax deductions to make it affordable.
Get goal oriented
It starts with writing down a goal, which could be: “I don’t want to be poor!” or better still, to be more positive, “I want to be financially independent”.
This next bit is really important and it applies to both women and men.
Change your reading, listening and viewing to match your new goals and day by day you will get money smarter. And month-by-month, your wealth will grow and so will your independence, your self-belief and your power to avoid being financially discriminated against. It’s a super plan to avoid being screwed — excuse the French!
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
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Published on: Tuesday, September 15, 2009blog comments powered by Disqus